Maybe someday, there will be a new island formed just off the coast of Hawaii.Allen County officials pointed to the mortgage crisis and the ongoing recession as factors that depressed local property values.
The value of all Allen County property for taxing purposes barely climbed above 2008 values with an increase of just 0.18 percent. And 2009 values for residential property were down, according to information released by Allen County Assessor Stacey O'Day.
"It's pretty stagnant," O'Day said of 2009 assessments, which will serve as the basis for property tax bills mailed in 2010.
This year's assessed values reflect real estate sales during 2007 and 2008 – a period that saw the real estate market crumble from a surge in mortgage foreclosures. Unemployment stemming from the current recession continued to keep foreclosure rates high this year.
The widespread foreclosures affected assessed values only in a few areas of the county this year. But foreclosures combined with the effects of the recession will take a heavy toll on 2010 assessed values, O'Day said.
Sales this year have slumped, offering assessors less data to work with in setting 2010 values. That will put more weight on foreclosures and the sales that occurred in 2008, she said.
Under Indiana law, 2009 assessed values are based on real estate sales in a neighborhood from the previous two years.
But lower assessed values do not necessarily mean homeowners will see smaller tax bills next year.
Government spending, new caps on property taxes plus individual exemptions and credits all affect the taxes owed, O'Day said.
Countywide, residential property is down 1.18 percent compared to 2008 values, but all other property classes – from agriculture to utilities – increased.
Identifying homes that were thought to be owner-occupied as rental properties increased assessed values in the multifamily category and shrank the value of residential property, O'Day.
But foreclosures also played a roll in limiting assessment growth in some areas, she said.
Foreclosures were the main cause behind a 5 percent drop in values for Wayne Township homes, township Assessor Bev Zuber said.
In 57 of the township's 262 neighborhoods, more than half of the homes were in foreclosure, allowing assessors to consider the sales back to the bank as a valid sale when determining an area's market.
Using foreclosure sales to set assessed values brings down the entire neighborhood, Zuber said.
"In some areas, foreclosures are the market," O'Day said.
As the mortgage crisis began spiraling out of control in 2007, most affected homes were in southeast Fort Wayne. However, foreclosures spread to other areas in 2008, affecting homes in Waynedale, West Central and the Eastbrook-Westbrook neighborhoods, Zuber said.
But homes in neighborhoods such as Southwood Park or Woodhurst continued to sell at high prices, stabilizing or increasing assessed values, Zuber said.
Foreclosures not only reduce home values, but they can also destabilize a neighborhood and affect families for years to come, said Heather Presley, Fort Wayne's deputy director for housing and neighborhood services.
"Vacant homes are oftentimes the seed that can create other issues such as a crime," Presley said. "But foreclosure in particular is harmful to families. There is a family that is unhoused and less-credit worthy … that family won't be able to return to that neighborhood as a homeowner again."
The city received a $7 million federal grant this year to renovate vacant foreclosed homes and sell them. City officials hope that will stabilize both neighborhoods and home values, Presley said.
Sales from those homes in the program, which covers the city's urban center, will improve assessed values in the future, Zuber said.
