Sunday, September 7, 2008

Declining Sales Prices

If anyone doubts that next year's tax digest will be down, read on. This year the tax digest went up 8% in value while many people believed Savannah Chatham was basically flat in value . Let's remember 2 things: First, the tax digest accounts for around 75% of all revenue coming into the county treasury, and secondly, that the value of any digest must be built on sales information from the PRIOR year.

Thus, this years 2008 tax digest was based on sales activity from 2007. The 2009 tax digest will be based on 2008 sales. Now let's take a look at some recent sales from today's Savannah Morning News "Property Transfers" keeping in mind that these sales and others like them will be what is used to figure next year's tax digest.

144 Rommell Avenue 2008 tax value = $161,500
Sales price = $135,000

Decline in value = 16.4%

152 Lewis Ave 2008 tax value = $382,000
Sales price = $259,000

Decline in value = 32%

116 Longwood Drive 2008 tax value $244,500
Sales price = $237,500

Decline in value = 3%

312 E Hall Street 2008 Tax value = $227,500
Sales price = $219,600

Decline in value = 3.5%

1601 E 51st Street 2008 tax value = $255,500
Sale price = $246,000

Decline in value = 3.7%

I have not cherry picked low sales, this is what you too will find should you look. Bill Dawers has written about this in his City columns and the sales numbers confirm his theory.

Essentially, what this means is that the next commission term, 09-012 will be facing declining revenue and since Pete Liakakis raised your property taxes in 2005, you can pretty well expect him to do it again. This of course would not be necessary if Pete would take a position and lead on Impact Fees on new construction.

I don't know about you, but if on one hand I have to choose between major property tax increases, or, my government could choose to assess a one time fee on new home construction paid for by the buyer who wanted to move here, I choose Impact Fees.

No comments: