Washtenaw County residential property values still falling in 2010 but pace slows

The numbers, said Dick Steffen, manager of the county’s equalization department, “are a preliminary report card.”

The percentages are based on the factor municipal assessors use to set assessed values. Those will be sent to homeowners by the end of February before their respective boards of review meet to finalize them.

The county studied property sales, as recorded on deeds during 2009, to determine the values.

“It all comes from the market,” Steffen said.

The market showed, on average, a similar sales volume to 2008 and falling average sales price.

But since the second half of 2009, Realtors and appraisers have reported areas of stabilizing prices - particularly in communities with few foreclosures - which likely is driving the improvements in the county data.

"The last three quarters are the first time we've seen average sales prices trend (up)," said Peter Hendershot, an appraiser with Affinity Valuation Group in Ann Arbor. "It means prices are stabilized or are in the process of stabilizing."

The falling numbers in the county valuation report represent averages across a community. So individual homeowners can expect to see variations in their own assessed values when municipalities send them out by the end of February.

The numbers also show how property values are faring during the recession - and indicate how cities and townships need to budget for future tax revenue.

In Chelsea, City Manager John Hanifan said officials have been forecasting with multiple budget scenarios to prepare for wide swings in value changes.

“Every year when we go through budgeting, we go through different scenarios … and figure out what the impact would be on services,” Hanifan said.

In 2009, Chelsea’s residential value dropped 10.8 percent, equal to the drop in Saline and near the median for the county. In 2010, the value drop is among the three highest.

But Chelsea’s worst-case scenario anticipated a 15 percent drop in revenue, Hanifan said, so it will have a roadmap for making adjustments.

“We’ll adjust the budget accordingly … and do our best to adjust to any budget decrease,” he said.

In Ypsilanti Township, officials watched their community rise to the top among the county’s foreclosure rates early in the recession. They used those numbers as an indicator to prepare for tax revenue drops, said Supervisor Brenda Stumbo.

“We knew we had to reduce expenditures to meet revenue, and that’s what we did,” Stumbo said.

Recent steps include dropping full-time staff to a 32-hour workweek and cutting pension contributions to pension plans for elected officials from 20 percent to 9 percent. Staff also face furlough days.

By next year, the township will be dealing with the closure of the General Motors Corp. factory near Willow Run, Stumbo said. That will add to concerns over erosions in the residential property values, which dropped 12 percent for this year after falling 15.5 percent in 2009.

The numbers are a contrast to the years when the township was among the fastest-growing municipalities in southeast Michigan.

“We used to budget for 6 percent (revenue) growth every year,” Stumbo said. “It’s just a different time.

“… We’re just making the business decisions to make expenses equal to revenue,” she said. “It’s getting really close. But this year is a little better than last year, so hopefully the downward trend has stopped.”