As we approach this holiday weekend you should all be aware of the article in today’s Detroit Free Press entitled "Home value havoc not over".
This article is somewhat misleading with respect to its prediction that home values in Metro Detroit will continue to plummet. The premise in the article is based on information and opinions gleaned from the Oakland County Equalization Department.
Any of you that have attended the Coldwell Banker Weir Manuel Property Tax Seminars understand that the data collected and analyzed by assessors and equalization personnel is trailing data. The importance of that is they are making judgments based on sales data that occurred up to 24 months ago when the market was indeed in a free fall. Those of us that deal with current sales and inventory data understand that the number of available homes continues to decline and sales activity has increased. We are no longer seeing free falling values and most experts now agree that property values are stabilizing, at least in the low and moderate price ranges.
Much of the balance of the article focuses on declining school and municipal revenues and is accurate in that regard. Property assessments and taxes will indeed continue to decline for a period. But that does not mean that actual values will follow suit. In fact, it’s just the other way around. Property assessments do follow the real estate market, but there is typically a two or three year delay.
I wanted you all to have this explanation in case the topic comes up over the picnic table this weekend. Have a great holiday!