Want the good news or bad news first? Well, in this case, it’s like the old joke goes – The good news is: property assessment values are up. The bad news is: property assessment values are up.
For those concerned with property taxes, having a higher assessed home value means a higher tax bill. So that’s the bad news. The good news though is for a homeowner looking to sell, refinance or take out a home equity loan, there is more value in the house.
“Residential property assessments are up in all three Metro Detroit counties — nearly 12 percent, on average, in Oakland and Macomb counties and about half that in Wayne,” according to a Feb. 10, 2015 Detroit News article by Ursula Watson.
That’s in fact very good news for a lot of Metro Detroit homeowners who bought homes in 2005-2006 at the peak of the real estate bubble. Many have been stuck owing more on their mortgage than the home was worth.
The Detroit News article, “Metro area home values on upswing” explained, “Many homeowners found that their houses were worth substantially less than they’d paid for them during the earlier real estate bubble. Their properties were worth less than what they still owed on them, or ‘under water.’”
In Michigan, the assessed value of a residential property is supposed to be half the market value. According to the West Bloomfield Assessor’s Office pamphlet mailed out with tax assessment notices, “The Assessor’s office spends a considerable amount of time analyzing sales in order to estimate property values as of December 31, 2014. Property values are not based on the individual sales price, but rather the usual selling price.”
Both tax assessments and private appraisals are primarily based on “comps” or comparable properties nearby that are a similar size and have similar features.
Come spring, the busiest season for realtors listing homes, we may see an increase in the number of properties for sale. Homeowners who waited for the rebound may take their chance now to sell and move.
One segment of the population that may benefit from increased home values are those who have desired a divorce but couldn’t afford one with no equity in their homes. The increased values may make divorce financially feasible where it has not been for the past couple of years.
“Some couples need the equity in their home to be able to afford to live after a divorce,” said Kathryn Wayne-Spindler, a divorce attorney in Milford, MI. “An experienced attorney can help them get a fair and equitable share of that equity in the divorce settlement when the house is sold.”
When contemplating a divorce though, finances are not the only real-estate hurdle. Milford realtor Norm Werner suggests preparing yourself emotionally for the end of the marriage by staging your home. He gives practical suggestions such as removing family photos and changing the man-cave or sewing room back into a den. He also recommends getting rid of old swing-sets, sandboxes, above-ground pools and other items that may hold family memories but will detract from the potential sales value of the home. If you’re having trouble letting go, he recommends taking photos of the rooms and yard as they were. All of this preparation will help you switch from seeing your house as the home where memories have been made, to seeing it as a valuable asset that is going to allow you the funds to rebuild your life in a new home after the divorce.
In his blog, “Save the Home; but, Sell the House,” Milford Realtor Norm Werner wrote, “It’s time to move your thoughts of it as a home into your memories, where it will exist forever; and start seeing the things that need to be done to make this product (the house) more saleable.”
The Detroit News, “Metro area home values on upswing,” Ursula Watson, February 10, 2015. http://www.detroitnews.com/story/news/local/metro-detroit/2015/02/09/metro-area-home-values-upswing/23156343/
myRealtyTimes, “Save the Home; but, Sell the House,” Norm Werner, October 6, 2014.
Norm Werner, www.movetomilford.com