What is Your North Shore Home Worth? Is Your Assessment Correct?

As this is my first posting on my Patch blog, please allow me to introduce myself.

I am David Tatarowicz, I have lived in Shorewood for almost 20 years; I run a furniture refinishing, repair and restoration company, located in Bay View; and I have been a licensed Wisconsin real estate broker for about 12 years.

In addition, I have been blogging for about the past five years, mostly on issues relevant to Shorewood and the North Shore, and occasionally other items interest, and a little on state and national politics.

THIS FIRST POSTING IS ON THE VALUE OF HOMES IN THE NORTH SHORE, AND HOW ACCURATELY HOMES ARE ASSESSED.

It would be a very big undertaking to review every recent home sale on the North Shore, so I have used the tried and true method of random selection of sales that have occurred in this calendar year.

I did not do all North Shore communities now, but if requests are made, I will be happy to cover other communities later.  I choose Shorewood and Whitefish Bay for this first analysis, as they have a pretty good number of sales over the past five months. 

I have only analyzed single family home sales, and did not include duplexes, multifamily, or commercial properties.

In addition to my experience as a real estate broker, I have also taken the required courses for appraisal and passed both the state and national tests. 

The CONVENTIONAL WISDOM that I have been hearing from other real estate licensees, is that home values seem to be back to where they were at in 2004.

I therefore decided to use a comparison of the home sales in three ways.  1) The SOLD price NOW.  2) The ADJUSTED ASSESSED VALUE in 2004.  3) The ADJUSTED ASSESSED VALUE FOR  2010

Assessments for 2011 are in the Open Book and Appeal Stages now, and unless contested, will likely be the same or very close to the 2010 number.  Also, the 2010 number would be the most current one for the Buyers of these Properties.

I did not include any foreclosure sales.

SHOREWOOD SALES AND ASSESSMENTS

There have been 25 Single Family Home Sales in SHOREWOOD from January 1, 2011 through May 25, 2011.  Picked randomly from those sales are the following numbers.

(Please note, I did some minor rounding of numbers for ease of comparison)

SOLD PRICE NOW                        2004 ASSESSMENT                        2010 ASSESSMENT

$135,000*                                                         $215,000**                                         $225,000

$179,000*                                                       $248,000**                                          $268,000

$230,000*                                                      $235,000**                                         $253,000

$343,000*                                                    $257,000                                                $356,714

$498,000*                                                      $480,000                                 $546,000

$812,000*                                                    $751,000                                 $847,053

NOTE:  In every case, the purchase price was below the current assessment.*   The lower priced homes had the biggest disparity being assessed approximately $100,000 more than the proven market value by virtue of sale.  Half of the homes had purchase prices below the 2004 assessments **. 

Of the three homes that sold for less than the current assessment, but above the 2004 assessment, the differences between the current sold prices and the 2004 assessments were $86,000,  $18,000 and $61,000. 

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WHITEFISH BAY SALES AND ASSESSMENTS

There have been 62 Single Family Home Sales in WHITEFISH BAY from January 1, 2011 through May 25, 2011.  Picked randomly are the following numbers.

(Pls note I did some minor rounding of numbers for ease of comparison)

SOLD PRICE NOW                        2004 ASSESSMENT                        2010 ASSESSMENT

$80,000*                                                           $146,000**                                             $167,000

$157,000*                                                       $174,000**                                             $190,000

$181,000*                                                      $183,000**                                             $221,000

$208,000*                                                     $240,000**                                           $328,000

$353,000                                                       $232,000                                                 $276,000

$393,000                                                      $254,000                                                $388,000

$445,000                                                     $356,000                                                $418,000

$594,000*                                                 $470,000                                                $607,000

$1,195,000                                                $642,000                                                   $963,000

NOTE:  In five out of the nine sales shown,  the purchase price was below the current assessment.*   As with Shorewood,  the lower priced homes had the biggest disparity, between their assessed value  and their proven market value by virtue of sale.  Four of the nine  homes had purchase prices below the 2004 assessments **. 

 Of the Sales listed, all the houses that sold for less than $300,000 were sold for less than both the current and the 2004 assessments.  Four of the five homes that sold for over $300,000 were sold for more than both the 2004 and the current assessments.  One of them was for less than the current assessment, but above the 2004 assessment.

CONCLUSIONS:

All of the SHOREWOOD homes sold for less than the currently adjusted assessments.  The biggest discrepancies were on the lower cost houses.  This means that those homeowners were paying more in property taxes than the value of their home was worth

If all the lower valued Shorewood houses  are being disproportionately assessed higher than their Market Value,  than the lower cost homeowners are paying more in property taxes, and Subsidizing Lower  tax payments on the higher priced homes.

WHITEFISH BAY has a better record of not over assessing their homes, based upon this sampling., but have the same tendency to make higher assessment mistakes on the lower costs homes.  If we take the home sale for  $1,195,000 out of the equation, overall disparities get much narrower.

OVERALL – If you are planning on buying or selling a home in Shorewood or Whitefish Bay, the 2004 assessments will be a good guide towards the current market value.

CAUTION – it is not known how many of these sales were for homes that had sewer backups.  Owners of any house that had a serious sewer backup, in my opinion, should expect to be penalized by at least $50,000 off the value of their home.  Houses with minor sewer backups should expect somewhere between $20,000 and $35,000 devaluation, while non-sewer flooding or seepage could devalue a house in the $10,000 to $35,000 range, depending upon severity.

 WHAT DO YOU THINK?  ANY OPINIONS  OR QUESTIONS WELCOMED!