Live chat: Wednesday at 10:30 a.m. with Douglas County Assessor Roger Morrissey at omaha.com/assessor.
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Nearly 30 percent of the houses that sold recently in Douglas and Sarpy Counties have current tax valuations that are higher than their sales prices.
That means those homeowners could wind up paying more than their fair share of property taxes unless they succeed in protesting their valuations during this month's Board of Equalization appeals process.
The World-Herald compared 2013 valuations with market prices for more than 10,000 homes that sold since January 2012 in the two counties.
The typical, or median, valuation for those houses in Douglas and Sarpy Counties was about 96 percent of the selling price, which meets Nebraska's standard for valuation accuracy. State law calls for valuations to be within the 92 percent to 100 percent of market value.
But The World-Herald also found that fewer than half the house sales fell within that target range. Instead, most were either too low or too high.
While the analysis looked only at houses that sold recently — and therefore have evidence of what they are worth — it suggests that there could be a similar gap between valuations and estimated market values for other houses in the two counties.
Property owners who think their valuations are not accurate can file protests during June, regardless of whether they received new valuations in 2013 or whether they had a recent sale. But homeowners who appeal will need to show why their valuations are too high or not equal to those of comparable homes.
The World-Herald analysis showed:
» Douglas County's valuations were less accurate than those in Sarpy, mainly because the Douglas County Assessor's Office didn't change as many valuations as its Sarpy counterpart. Among Douglas County houses with updated valuations, the county matched Sarpy's accuracy.
» Houses that sold for less than $100,000 were particularly likely to have too-high tax valuations. Houses that sold for more than $500,000 tended to be valued too low.
» The oldest neighborhoods often had more houses with high valuations than other areas. That included north and South Omaha, as well as Bellevue and La Vista. But pockets of too-high valuations also were found in some suburban areas.
Dozens of houses were assessed higher than recent sales prices in the Piedmont and Wycliffe neighborhoods, east of 156th Street between West Dodge Road and Pacific Street.
For example: Three houses sold during 2012 on South 151st Circle, a cul-de-sac of split-level and trilevel houses near Pacific Street in Piedmont. Each brought less than the Douglas County Assessor's Office says it is worth in 2013.
One of the houses on the cul-de-sac sold for $136,500 a year ago but had a valuation of $158,100. If the valuation were reduced to the selling price, next year's tax bill could go down about $450.
To be fair, it's impossible for county assessors to perfectly estimate how each individual house might fit into the volatile housing market.
For example, the selling price can be affected by whether the seller or buyer is particularly motivated to make a deal. A house can go through a foreclosure or major renovations — or both.
And since county appraisers generally don't see the inside of the house, they don't know its true condition or all its features. It could be worth more than average if it has an updated kitchen with granite countertops. Or less if it has dingy carpet or cracked basement walls.
“In mass appraisal, we're just trying to hit the middle — and make the middle as wide as possible,” said Barry Counch, chief deputy assessor for Douglas County.
It's also a system almost guaranteed to lag the actual housing market.
Technically, the new valuations are supposed to reflect market value as of Jan. 1, 2013. But the state checks valuation accuracy by comparing the 2013 valuations set this spring to a two-year batch of house sales — October 2010 to September 2012. County assessors tend to use those same sales as their own benchmark in setting valuations.
The World-Herald analysis looked at more recent sales to see how much they mirror current valuations. That's a tougher standard than the state comparison and includes some sales this year that hadn't even occurred when county assessors set the latest valuations.
Part of Douglas County's accuracy challenge is that it targets only some neighborhoods each year. Douglas County Assessor Roger Morrissey said he doesn't have enough staff to reappraise the county's 200,000-plus parcels annually.
Instead, his staff each year determines which neighborhoods are least accurate, then put its efforts into changing valuations in those areas.
The Piedmont neighborhood hasn't made the cut since 2009.
Couch said his analysis of Piedmont and a broader grouping of nearby subdivisions showed that the typical house valuation was slightly below its selling price, although a number of individual houses were outside the target range.
Not all valuations are too high.
In fact, until the real estate market slumped a few years ago, the biggest valuation challenge for county assessors was to keep up with rising prices that left many houses underassessed.
If the market is starting to turn around these days, that trend alone could turn a too-high valuation into one that is exactly right.
And sometimes it's hard to tell just what a house is worth.
Take Carri Kopec's little bungalow in the Homestead subdivision near 50th and Q Streets, a two-bedroom house with a large yard and a two-car garage.
Is it worth the $70,000 selling price in a 2005 sale?
Or the $25,000 it brought when the Federal Home Loan Mortgage Corp. dumped it in 2009 after a foreclosure?
Or perhaps the $79,000 that real estate investor John Rice received from Kopec in early 2012 after a top-to-bottom renovation?
Over the past five years, Douglas County's tax valuation has ranged from a high of $76,800 to the current $64,100, set in 2012 amid the housing slump.
That was before the county learned of Kopec's $79,000 purchase or the money Rice had spent on new wiring, plumbing, drywall, roof and just about everything else.
“I actually barely broke even,” Rice said. “It was a total wreck. It just hadn't been kept up for the past 30 years. I made it all brand new.”
Kopec, an Ohio native who works for Wells Fargo, said she has been happy with her house. But she's about to write a new chapter to the story of her house's ever-changing value.
She's now engaged and plans to move in with her fiance. So she'll be putting her bungalow on the market.
“I'll probably try to list it for $85,000 or so,” Kopec said.
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