Whatever the market will bear?

This is the time of year when folks may be busy doing their taxes, planning Valentine getaways, taking trips to warmer climates and, perhaps, waiting for the dreaded assessment notice from their local community.

Seems like a day does not go by without an article in some paper or online about the falling value of homes or the number of foreclosures.  If you are a glutton for punishment, you can register with zillow.com and get an email update of your falling property values on a regular basis.

Does anyone really know what your property is worth without making an 'in person' assessment?  And do we want these assessors tromping through our house?  (My answer is a resounding 'no'.)

When market prices (notice I did not say 'value') were escalating, everyone was complaining about their property taxes, so we passed Proposal A in 1994.  (I voted with the minority.)  Many were more than happy to sell their house for a lot of money, they just did not want to pay the taxes on that value.  As a result of Prop A, only new buyers paid the higher taxes on the uncapped assessment, always upward in those days, and the others sat back and dreamt about how much they could sell their house for in the future.

My neighbors and I were amazed at what some homes sold for in our neighborhood.  Places that were unkempt on the outside and were even worse on the inside sold for more than we thought anyone would ever pay.  But the thinking in those days was that property values and prices would always go up, not down, so 'how could you lose?'  It was an investment, right? 

Fast forward.  We are now told that our properties are worth roughly what they were in 1996.  Really?  Is that assuming we have done nothing to them in the meantime?  (True for some homes I know of.)  But what about homeowners who upgraded and replaced fixtures?  What about curb appeal?  Does the Home and Garden channel on TV have it all wrong?

Every year I go over my home insurance costs with my agent.  They tell me they have to base the price of my insurance based on the replacement value of my home, not the market value according to the assessor.

So, let's realize that this mess we have with declining property values has to have some blame placed on aggressive assessors who were more than happy to use inflated sales prices to assess property and thereby generate more taxes for their local unit.  And now are backpedaling to adjust values lower.

All in all, we have a system that is a MESS.  Make me an offer.