For most of the past decade, the 4,500-square-foot brick ranch overlooking the golf course in Eagle Run West was considered a million-dollar house.
But after the real estate market slumped, Jill Coyne picked it up last fall for a cool $700,000.
So far, the Douglas County Assessor's Office hasn't caught up to the new reality. The new tax valuation is for $875,900 — down from last year, but still 25 percent more than its recent selling price.
Coyne plans to protest her valuation this month to the County Board of Equalization.
“Seems like I ought to be in line to get that corrected, that's what I'd say,” Coyne said.
She's not alone.
More than one-third of the homes that were sold in Douglas and Sarpy Counties last year are overassessed for tax purposes, with property valuations that are higher than their selling prices, according to a World-Herald analysis.
The analysis suggests that county assessors haven't entirely reflected the tough real estate market, even though they dropped far more valuations this year than they increased. New valuations were mailed to residents in late May.
The analysis also suggests that many homeowners might have strong cases to make this month before their county boards of equalization. Property owners can appeal their valuations, regardless of whether the assessor made a change this year.
Homeowners can find their new valuations and review evidence for a possible protest on The World-Herald's Curbwise.com website.
For this article, The World-Herald compared 7,190 home sales from 2011 to their latest tax valuations. Those valuations, together with the tax rates set this summer by local governments, will determine next year's tax bills.
The analysis found that both Douglas and Sarpy Counties have an increased level of overassessed — and potentially overtaxed — homes.
In Douglas County, 37 percent of the homes sold in 2011 were assessed for more than their selling prices, up from 33 percent a year earlier. In Sarpy, overassessed houses were 35 percent of the 2011 sales, up from 25 percent.
At the same time, about one-fifth of houses sold in the two counties were assessed too low, compared to the state target of having valuations at 92 percent to 100 percent of market value. That's a reduction in underassessed houses from last year.
Countywide, both counties meet state standards for the accuracy of their 2012 valuations. That's because the state bases its standard mainly on median valuation data.
But the state's statistical tests don't mean that all individual valuations are correct.
In addition, state officials examine sales in a two-year time frame — this year, the time frame was July 2009 through June 2011. But that broad period can obscure what's been happening more recently in the real estate market.
Barry Couch, Douglas County's chief deputy assessor, said he's been seeing lower house prices in some neighborhoods in late 2011 and early 2012.
In some neighborhoods, Couch said, he was able to take those trends into account through lower 2012 valuations. In other neighborhoods with declining prices — Florence is one such area — he'll look at valuation cuts in 2013 if the real estate market stays soft.
“Let's see what the market does,” he said. “Maybe we're over the hump.”
Douglas County overhauls valuations in only a portion of its neighborhoods each year, leaving more than 100,000 homes untouched. The World-Herald analysis indicates that homes sold in areas with unchanged valuations were most likely to be out of line.
Among Douglas County homes with no change in valuation, 43 percent of those sold have current valuations that are higher than their sale prices. For those that were raised or lowered this year, just 25 percent were too high.
In Sarpy, nearly all valuations are adjusted annually. But the county still had 35 percent overassessed.
To be sure, it's nearly impossible for county assessors to meet Nebraska's target for valuation accuracy for every house. Actual prices can vary with shifting real estate demand or the motivations of individual buyers and sellers. In addition, county appraisers don't know much about a house's interior condition or characteristics, which can make a difference in the selling prices.
“It's an imperfect market, and we're limited on the data,” Couch said.
The World-Herald found that valuations are inaccurate in different ways, depending on price. Less expensive houses are more likely to be overassessed, while expensive houses tend to be assessed too low.
That's the opposite of what happened with Coyne's house in Eagle Run. She said it was on the market for some time and needed some work.
“The fact of the matter is, we bought the house for $700,000 even,” she said. “We made an offer and it was accepted. So I don't know if that's what the house is worth or not, but it seems like that's a good argument.”
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