Woodstock assessment appeals skyrocket
From 2009 to 2011, county homes and properties in Woodstock-area townships saw equalized assessed values drop by roughly 15 percent.
The drop in assessment figures is due to the housing market crash that began about five years ago. Veronica Myers, Dorr Township assessor, said average assessments have dropped between 20 and 30 percent in Dorr since the housing crash, with some neighborhoods exceeding those figures.
“Overall, some of the larger drops in market value have been seen in the newer subdivisions that were under construction when the housing market crashed,” Myers said. “Also, some older subdivisions appear to have been hit harder than others with many competing foreclosures in the neighborhood.”
The number of homes selling as foreclosures and short sales — roughly half of the single-family homes sold in Woodstock through August — continues to drive down home prices further. The average Woodstock home, as of Sept. 25, is selling for about $168,665, about $10,000 lower than last year’s averages and $110,000 lower than averages five years ago.
“We need to get to a point where we’re done [with foreclosures and short sales] for it to level off,” said realtor Rick Bellairs last month. “Five years ago, we thought it was [a temporary lag] because prices went too high too fast. Now we’re five years into it, and we probably got a couple more years to go.”
Even if the housing market turns, residents won’t immediately see an uptick or a leveling off in their assessments.
“The difficulty is that by Illinois state statute, I value properties based on a prior three-year average of sales,” Myers said. “So even while I do reassessment, the assessments will not reflect the current market values. The 2012 assessments are based on sales in 2009, 2010 and 2011. This three-year average system works well in an upward market because taxpayers see their assessment is behind the curve. In a downward market, however, people do not want to see this lag in value.”
This lag, in part, has led to a large number of assessment appeals in Dorr Township and the county as a whole. In 2005, the McHenry County Board of Review had a total of 742 assessment appeals in all 17 townships in the county. They granted 8,893 appeals in McHenry County and 788 appeals in Dorr Township alone in 2011.
“Because of the large number of appeals, we are asking people this year to file an appeal directly with the McHenry County Board of Review,” Myers said. “The McHenry County Board of Review has the authority to value properties using more current sales, rather than use a prior three-year average of sales.”
While deadlines to file appeals have passed in Hartland, Greenland and Seneca townships, Dorr Township residents have an opportunity to challenge their assessment until Oct. 12. For information about how to file an appeal, visit www.co.mchenry.il.us/departments/assessments.
Despite housing prices taking a sharp decline, tax bills are unlikely to see as sharp a decrease or any decrease at all. Instead of collecting fewer taxes, tax rates often rise to make up for falling home prices and a shortfall in revenue.
Each public taxing body — such as a school district, municipality or a township — will levy a certain amount of money to operate. The county clerk’s office calculates tax rates to determine how much money is extended to the taxing body. Most public taxing bodies choose to increase the levy — the amount of money collected — but some have chosen to keep the levy flat despite the opportunity to bring in additional tax dollars.
Taxing bodies may receive 5 percent more than the previous year or the consumer price index, whichever is lower. This is known as the “tax cap.” The CPI, which estimates the rate of inflation, was certified at 3 percent for next year’s tax bill. It was 1.5 percent for the 2011 tax cycle, 2.7 percent for the 2010 tax cycle and 0.1 percent for the 2009 tax cycle.
The tax cap was developed to protect taxpayers by limiting the amount of real estate taxes taxing bodies could collect as property values increased. In a market where assessments decline, the tax cap still allows for increases to the total levy despite housing values being less than previous years.
This means that unless a taxing district requests to levy less money, the county clerk must set a higher tax rate. If requested funding calculates a rate higher than the statutory limit (tax cap), it is reduced to that limit.