Trying to make up for losses
ALPENA – The City of Alpena relies on money collected through taxes to provide the services the taxpayers expect. Over the course of the last four years however the value of homes has dropped significantly, which has led to a decline in assessed value and taxable worth.
The worst of the market collapse may behind us however, if recent numbers and trends continue. In the city’s annual report on assessments received from the county, it shows the latest assessments are near the 50 percent benchmark that is in place and, according to City Assessor Jeff Shea, some of the metrics show the market plunge may have flat-lined. He said it is too early to tell if it is the market has reached its bottom or if there will be a bounce in value, but that the latest numbers did improve slightly.
The assessment covered 72 residential sales in the city totaling $4,606,464. The assessed value, which needs to be between 49 and 50 percent of the true cash value is $2, 269,821, or 49.33 percent. Shea said that is about a 1.36 percent increase from 2009-10. Overall the city has 4,296 residential parcels assessed at $128,880,400. Shea said the declining values has had a negative impact on the city’s budget and because of the lost revenue it had to pinch pennies for several years.
“We have had to cut 50 to 70 percent of our capital projects. Normally we are able to do four or five different street sections, three to five blocks long, water and sewer, but I think last year we did a block and a half and maybe a block the year before,” Shea said. “There have been a lot of cuts and because of them we have been falling behind on things.”
Shea said in a good market assessments are done on data from two years. He said when the market is low, it is done only on a per year basis. He said it is impossible to predict if the market has reached its lowest level.
“I really don’t know if this is the bottom or not. What I can say is it appears to have leveled off, but whether this is bottom, or if we are leveling off and will go down farther I don’t think anyone can predict,” Shea said. “Hopefully we have hit bottom and we are turning around and going the other way. A lot of the sales I’m seeing are encouraging, especially the $100,000 homes where the sellers are getting as much as they would have in 2008, but it is hard to say where we are at.”
There are 473 commercial parcels in the city worth $39,533,200. There were 12 commercial parcels sold in the last assessment period valued at $1,215,434 true cash value and $616,496 assessed value. The assessed value was 50.82 percent of the true dollar amount. Shea said even though commercial property was over 50 percent, a true indicator of what the market is what the value of homes being sold, not businesses. He said commercial buildings tend to hold on to their value better than homes. Shea said another indicator on market health is how many homes are being repossessed and sold by the banks.
“The amount of forclosures is still worrisome. It is still up there,” Shea said. “You hate to see it, but they really haven’t slowed down as far as we can tell. It hurts the market, because there might be a guy down the street trying to sell his home and he has a foreclosed home on each side of him listed at half of his price what they should be and here he is trying to get what his house is worth and as a result he ends up dropping his asking price the values will go up when those cheaper foreclosed homes are off the market.”
Steve Schulwitz can be reached via e-mail at email@example.com or by phone at 358-5689.