Indiana's system of property tax reassessment may be constitutional, but some say it is far from perfect.
2007 reassessment forms are being mailed in St. Joseph County where they are already generating controversy.
In the 400-block of Blaine in South Bend, it seems they are boarding up more homes than they have been selling.
Only three of the 13 dwellings are now occupied.
About the only place the Blaine housing market looks good is on the “paper” used to print the latest reassessment notices.
“I understand why all these homes are being let go,” said property owner Gene Wilkeson. “People are going to lose money, why keep their houses?”
Gene recently bought a house on Blaine for $7,500.
He recently found out that it is being assessed at five times that amount, or $37,500.
The latest assessment is up $12,000 from the last.
The increase alone represents more than he paid for the property.
“I feel sorry for the people, my tenants,” said Wilkeson, “something is going to have to give.”
Assessments on all ten of Gene’s inner city properties have increased, and he is not alone.
”My own property, I have a couple that are 200% increase in assessed valuation,” said Edi Mathis, the President of the Real Estate Investors Association of North Central Indiana, Inc.
She fears the situation could be devastating to a housing market that may still be reeling from the last reassessment.
“You’re going to see increased vacancy, increase foreclosure the likes of which this community has not seen, and I feel cannot withstand.”
Part of the problem could be that the latest reassessment is actually based on real estate sales figures from 2005.
Mathis says that was a pretty good year for sales, which was followed by a pretty bad slump.
While the new assessed values were calculated by reviewing data from 8,600 separate real estate transactions, the formula ignored a big part of the downside.
It did not acknowledge the impact of 2,800 properties sold at mortgage foreclosure sales.
Receipt of the reassessment notices starts a 45-day period during which property owners can appeal the new assessed valuation.
The Real Estate Investors Association will devote a meeting to the subject.
The session is open to the public, free of charge.
It will be held June 28th, at 6:30 p.m. at the Elks Lodge on McKinley in South Bend.