Atlanta property taxes: One neighborhood’s ups and downs

AJC special investigation: Property tax meltdown

Print
E-mail

By David Wickert

The Atlanta Journal-Constitution

Gwinnett County says Michael Hill’s home near Lawrenceville is worth $233,100 for the 2010 tax year. A recent private appraisal shows it’s worth $178,000 — $55,100 less. How can that be? The answer: It’s not just Hill’s home. His entire neighborhood is overvalued by the county by about 32 percent.

Enlarge photo

Gwinnett County says Michael Hill's house is worth $233,100, and he's paying property taxes based on that amount. But a recent private appraisal shows his house is worth only $178,000. County officials acknowledged they've got it wrong.

Johnny Crawford, Jcrawford@ajc.com Gwinnett County says Michael Hill's house is worth $233,100, and he's paying property taxes based on that amount. But a recent private appraisal shows his house is worth only $178,000. County officials acknowledged they've got it wrong.

More business news

A look at Hill’s neighborhood — which includes the Fountain Lakes and Brickshire Park subdivisions — shows the shortcomings of the mass appraisal system and the role distressed sales and state law play in appraisals. Gwinnett Chief Appraiser Steve Pruitt said the neighborhood also shows “how difficult it is to identify a decent value in this crazy market.”

The neighborhood: Hill lives in a stable neighborhood of 239 properties built in the early 2000s. The houses are of average quality and range from 1,800 to 2,500 square feet. They originally sold for $175,000 to $225,000. By the mid-2000s, they were worth $180,000 to $240,000, Pruitt said.

Mass appraisal: County appraisers examine sales from the previous year to reappraise entire neighborhoods. Appraisers say that, to give them a true sense of the market, at least 5 percent of properties should sell in a given year. That would be 12 sales in Hill’s neighborhood. Short of that, county officials may decide not to reappraise the neighborhood that year.

2008 appraisals on target: Only seven homes in Hill’s neighborhood sold in 2007. None was a bank sale. A comparison of sales to county appraisals showed the county’s values are on the money. The county didn’t reappraise the neighborhood.

2009 appraisals under value: Twelve houses sold in Hill’s neighborhood in 2008; one was a bank sale. A comparison of sales to tax appraisals showed county values may be about 10 percent low. Based on that analysis, Pruitt said the county would have raised values in the neighborhood last year. But a new state law prohibited the county from raising anyone’s appraisal last year. The county made no change.

2010 appraisals high: Five homes in Hill’s neighborhood sold in 2009; two of them were bank sales. A comparison of sales to appraisals suggested that county values were 18 percent over market. But with so few sales, it’s difficult to say for sure. The county didn’t reappraise Hill’s neighborhood, but placed it on a “watch list.”

2011 appraisals: A look at 2010 sales shows a dramatic change in Hill’s neighborhood. Through October there were 12 sales, eight of them bank sales. A comparison of sales to the county’s 2010 appraisals suggests the county is now 32 percent over market. “Yes, the neighborhood will be adjusted downward in 2011,” Pruitt said.