In Lancaster County, the total value of assessed property increased a whopping 23% this year, a record jump that will provide a windfall for local governments and hefty property tax increases for many home, apartment and business owners.
Property owners can file protests through June 30 — 1,236 have so far — and the sticker shock prompted two residents to get out their calculators and computers and look for answers.
One of them, a computer engineer, made a website to help homeowners evaluate sales of comparable homes in their neighborhoods. The other, a certified public accountant, spent hours examining a report by the state tax administrator that led her to conclude lower-priced houses are being generally overvalued.
Gordon Smith, a computer engineer, was surprised when the preliminary assessed value of his home increased by $32,000. When the final valuation notice arrived with a $60,000 jump, bringing the value of his home to about $200,000, he was more than surprised.
He looked at the comparable sales listed on the Lancaster County Assessor’s site, but didn’t think they provided the detail needed to file a protest, and the searchable sales tab on the site was citywide, not by neighborhood.
So he spent the next three days making his own site, doing research for his own property and for a few friends. When requests kept coming in, he decided it was easier to make the site public. Lancasterpropertysearch.com now includes 100,000 properties in Lancaster County, their assessments, previous sales and other information.
Enter your property ID (you can look it up on the Lancaster County Assessor’s site) and set the search to find recent sales of homes in your neighborhood. The search engine allows you to select how large an area to search and to adjust the parameters based on the home’s age and size.
The search lists the properties, sale dates and sale prices, along with details of the homes from the assessor’s site — garages, roofs, plumbing fixtures, sprinklers — to easily compare.
Griffin put it on Reddit, talked to a television station and on Thursday his site got 19,000 searches.
He said he’s not trying to tell people what to do, he’s just trying to make it easier for them to research whether they should file a protest.
Although all real property in Lancaster County increased an average of 23%, all residential property increased 26%, according to documents the assessor filed with the state. The increase for existing homes (excluding new homes), was 23.6%. Commercial property increased an average of 16%.
Lancaster’s increase is larger than both Douglas and Sarpy counties, which saw overall average increases at 13% and 16.5%, respectively. Existing residential property in Douglas County increased 12.6%, and the increase was 12.2% in Sarpy County.
Griffin’s research has convinced him the Lancaster County valuations are all over the board — some under-assessed, some over-assessed and some seemingly on the mark.
“The numbers make no sense,” he said. “There’s not a lot of consistency in what they’re doing.”
Joan Casey, a certified public accountant, harbored similar concerns, which prompted her to do her own research and appear several times before the Lancaster County Board of Equalization and the Nebraska Tax Equalization and Review Commission.
The state property tax administrator, charged with evaluating assessments in the state’s 93 counties, concluded that in Lancaster County, residential property was assessed at 99% of market value, with commercial property at 97%. Both of those fall within state law guidelines, and in her report she also concludes the calculations used to assess property were adequate.
Casey, who delved into the state property tax administrator’s report, disagrees. She said she’s convinced the assessment process the county used was flawed, and while overall the county’s assessments fall within state law guidelines, the county generally over-valued lower-priced homes and under-valued higher-priced homes.
“This is truly a tax break for the wealthy paid for by the lower–priced homes,” she said.
Homes valued at less than $250,000 are generally assessed at greater than 100% of market value, she said, and those over that amount are generally assessed at 98% or below.
The components they used to value houses — assumptions made about garages and other elements — are wrong, Casey thinks, as is the way the county adjusted sale prices to reflect market value.
But County Assessor Dan Nolte and Brian Grimm, the assessor’s chief field officer, said that’s a misrepresentation, especially given the volatile housing market the past few years. Home prices have been increasing, and there are fewer lower-priced homes on the market.
The average sale price of a home in Lincoln this year is $252,100, Nolte said.
Those higher sales prices, driven by demand for fewer lower-priced homes, pushes up market value, which can skew the sales ratios used to evaluate homes, Grimm said. With mass appraisal there’s a median, with prices both above and below that, he said, and just looking at outliers is misleading.
Casey said she doesn’t think they are outliers, since of the 11,555 sales used in the sample submitted to the state, more than 5,000 are priced under $250,000 and, based on the state report, more likely to be assessed over market value.
Tom Kubert, president of Kubert Appraisal Group who has been a certified appraiser for 25 years, said the assessor uses computer models based on sales, and because it’s a mass appraisal system, some houses won’t fit the model.
Also, the comparable sales used by the assessor’s office can be older, which means more recent sales could be useful to people considering an appeal, he said.
Kubert recommends every property owner review their assessments and take a walk around their neighborhood and look at the comparable sales used by the assessor.
Those and other sales or changes to their home not reflected on the assessor’s site are what could win an appeal, he said — not arguing that the model the assessor’s office used is wrong.
“The problem is, statistics are interpreted,” he said. “The state has interpreted those statistics as acceptable.”
Still, property owners should take a close look at their property valuations.
“I think everyone should pay attention to their property value,” he said. “(Casey) is probably doing everyone a service by shining a light on it, but it certainly doesn’t mean everyone’s (home) at that price range is wrong.”