TRAVERSE CITY -- Jacki and Ben Newhouse can't find a buyer for their two-bedroom home that's listed for $8,000 less than its appraised value.
Yet Acme Township's assessor said the property's value increased $6,400 last year.
In Garfield Township, real estate broker Cindy Anderson recently bought a vacant lot for $55,000. Two months later the township assessed its value at $62,660.
New property tax assessments began arriving in mailboxes last week, and many homeowners discovered their property value is going up, along with their taxes.
"We haven't seen a big decrease like downstate, but it is a leveling off," said Laurie Spencer, equalization director for Grand Traverse and Leelanau counties. "Some are going up, some are slightly decreasing, but a lot of them aren't going to change much at all."
That doesn't make much sense to Jackie Newhouse, who hasn't had an offer on her renovated house in two months.
"I don't understand it. Everything you see tells you the market is terrible," Newhouse said. "Our house has gone through a complete renovation, but I'm not trying to recoup any of our improvements.
"I'm just hoping to get a little bit of our equity out of it."
Area real estate agents said rising assessments don't reflect the current market.
"We've lost 20 percent of market value in the last two and a half years," said real estate agent Carol Franklin of Traverse City. "Without a doubt, the local market is declining and it's still declining."
Anderson said she has clients listing homes near downtown Traverse City for $30,000 less than the appraised value.
"I have a sinking feeling assessors don't realize that some homeowners are having to sometimes sell for $20,000, $30,000, $40,000 less than what they bought for a few years ago," she said.
In Traverse City, the average home value increased 5.2 percent, city assessor Debra Chavez said.
Chavez said the city witnessed the largest hike because it doesn't have new subdivisions and builders trying to unload their inventory.
But not everyone in the city will see an increase. Many homes priced around $150,000 or less dropped 10 percent or more, Chavez said.
"They were being kept artificially high by the market and have dropped back down to where they should be," Chavez said.
Assessors: No slump in Garfield Township
In Garfield Township, the average home price jumped about 21/2 percent, said township assessor Jim Chrestensen.
In a letter to property owners, Garfield Township assessors blamed local and national media for portraying the housing market as "slumping." While true for most of Michigan, it doesn't apply to Garfield Township, the assessors said.
The letter said a large number of properties for sale gives the "impression" the market is declining.
Some residents aren't buying the explanation.
"How can the housing market not be depressed when you have more inventory than buyers," said Garfield Township resident Norbert Tutlis, who saw his assessments jump. "They're just raising assessments because the law allows them to raise it."
Anderson said her sales data show the average price of vacant lots in Garfield Township dropped $5,000 from 2006 to 2007, a far cry from the increase assessors attached to her new purchase.
"They're just wrong," Anderson said.
The letter sent out by Garfield Township assessors fails to note that assessments don't reflect current market conditions.
"There's assessed value, taxable value ... and market value and I've learned they have nothing to do with each other," said Kalkaska area real estate broker Sue Vowels. "They are not from the same country, they're not even from the same planet."
An assessment should reflect the true cash value of the property as of Dec. 31, 2007. State law requires assessors to use sales between April 1, 2005 and March 31, 2007, to determine cash value.
Assessments always trail the market, Spencer said.
Assessors also can't use most discounted foreclosure sales in their market analysis or the increasingly popular "short sales."
A short sale is when a bank agrees to take less than the outstanding mortgage on a home before it is foreclosed.
Franklin and Anderson said foreclosures started affecting the market last fall, and now account for about 10 percent of sales.
"Banks are sitting on a huge inventory right now and they are putting liquidation prices on the houses to try and unload them," Franklin said. "So sellers have to compete with the banks prices."
Foreclosures in Grand Traverse County jumped 63 percent in 2007, peaking at 291.
Grand Traverse Register of Deeds Peggy Haines said indications are 2008 will be just as bad or worse. Already, 68 homes are in foreclosure, just two months into the new year.
Away from bay, assessments fall
Assessment levels are mixed outside Traverse City.
In Kalkaska, Vowels said values have held their own, prices are still reasonable, and foreclosures are just now starting to have an impact.
Christopher Krellwitz, assessor for Elmwood and Empire townships, said he's lowered more assessments this year than any time since he began assessing in 1985, but still raised more than he reduced.
Krellwitz said values are dropping in high-end subdivisions, while lower-priced homes are holding their own, the opposite of what Chavez noted in Traverse City.
Antrim County's home values generally drop as the distance from Grand Traverse Bay increases, county equalization director Robert Englebrecht said.
Home values in the Mancelona area and the east side of the county primarily dropped, partly due to the working-class nature of the area, Englebrecht said. The west end of the county has higher numbers of vacation homes close to Torch Lake and the bay.
Values in Charlevoix County follow a similar pattern to Antrim, county equalization director William Wolf said. Homes situated along or near the waterfront generally are more stable than inland homes.
"The lake front doesn't seem to be hurting," Wolf said. "It's more of the interior homes."
With Michigan's struggling economy, out-of-state buyers are moving in looking for waterfront opportunities, Anderson said.
Home owners who disagree with their assessments can appeal to their local board of review, a three-member panel with the authority to lower assessments.
"By all means, fight any increase in assessment you get," Anderson said.
Property Values
Proposed increases in residential property values by county. Individual property assessments will vary.
Antrim: -1.5 %
Benzie: +0.4 %
Charlevoix: + 2.0 %
Grand Traverse +1.73 %
Kalkaska: +1.98 %
Leelanau: +4.2 %
Manistee: +2.4 %
Otsego: +0.71 %
Wexford: -1.0 %
