Valuation notices recently mailed to property owners in Adams County show an increase that is almost entirely based on an increase in land value.
The size of that increase is determined by sale prices within the surrounding neighborhood that have taken place between Oct. 1, 2016, and Sept. 30, 2018.
County Assessor Jackie Russell said according to appraisal standards that are established by the International Association of Assessing Officers, among the principles and procedures used is the allocation method, which states that a minimum of 15% of a sales price should be attributable to the value of the land.
In using that allocation method of 15% allocation to land value, properties are evaluated by sales in that neighborhood to come up with a price per square foot at a median rate for the most typical-sized lot in the neighborhood.
A smaller lot would see a greater percentage increase in land value than a larger lot.
“You’re going to see a larger value in that larger lot, but it’s also that base size,” Russell said. “That’s what most people have for their size of lot in that neighborhood, and so most people are going to be at that first-tier pricing, which holds the most weight of value.”
Hastings has about 20 neighborhoods. Suburban Hastings is a neighborhood, as is rural Adams County and each of the villages.
Property valuations are required by statute to be 92 to 100 percent based on the median assessment to sales ratio for all sales within that two-year period.
There were nearly 800 properties in the overall statistic measurements that were good sales and were considered in statistical measuring.
“When we started the statistical measurement we were at 86 percent and we’re just squeaking in at 93 after the land value changes,” she said.
When a property sells for more than its valuation that sale affects the value of all properties within that neighborhood.
“I’ve had people say ‘I just bought my home for $104,000 and my assessment went from $70,000 to $81,000. How can you raise my value that much?’ ” Russell said. “That particular sale is in our sales study statistics that just created the values that caused the increase.”
That sale increased the sales ratio from 67 to 78 percent. If that was the only sale in the sales study statistic period, the assessor’s office would have to increase the valuation to 92 percent to become compliant with state statute.
Even areas that have a blighted designation, such as the entire village of Juniata, saw valuation increases if sale prices increased.
“If you take a look at the market in Juniata you will see that our assessed values are still lower than what most of the properties are selling for,” Russell said. “Any time you see (rising sale prices) taking place, any time we’re outside of that 92 percentile range, values need to go up. That’s exactly what’s happening all over the county.”
She said the rule of thumb is if a property owner could sell his home for the given valuation then it is probably correct. That is market value.
Adams County is accepting property valuation protests until July 1. The form is available at www.adamscounty.org.
The Adams County Board of Equalization will hear valuation protests during the fourth week of July.
“You need to have some evidence to support the value you’re requesting,” Russell said. “You can’t just come in and say ‘I’m not valued appropriately. This value is just completely out of range and I would never be able to sell my house for this.’ Tell us why. We need to have that conversation.”
She said a real estate agent could provide a competitive market analysis, which may or may not require a fee. The property owner could hire an appraiser to appraise the property, which would include a fee.
The valuation increase is not the same amount as the property tax increase.
To determine the tax increase, take the valuation increase and multiply it by the applicable levy rate. For the majority of Hastings, where the total levy rate is $2.23, that would be multipling the valuation increase by .0223.
“My job as assessor is to set the value according to the market,” Russell said. “That’s all we do. We do not have any dealings with the entities that create the tax burden. I don’t know what they use their budgets for. I don’t know how much they are budgeting until that comes back to me with the levy creation in October.”