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Estimating Taxable Value Oakland County Equalization David Hieber
Estimating Taxable ValueOakland County EqualizationDavid Hieber
• Understanding Your Tax Base• The need for early estimates• Current market conditions
• Understanding trends for future estimates
• Making reasonable assumptions• Making modifications as more data is
availableFor more info on Proposal “A” . . .http://www.oakgov.com/equal/info_pub/
TAXABLE VALUE
ESTIMATE
Other Factors
Impacting TV
• History of Oakland County’s Values
• Sales Study Timeframe• 1 year sales study
• Market conditions: Sales of properties
• 2010 Inflation Rate Multiplier (IRM) or (CPI) = -0.3%• Most properties will have reduced Taxable Values.• Exceptions: New construction and uncappings (pop-
ups)
• Sherriff Deeds: Foreclosure Crisis• State Tax Commission Bulletin 6 of 2007
57% of Oakland County’s general fund/general purpose budget relies on property taxes.
$
Oakland County Parcel Count: 478,169
*
* 2010 Taxable and Assessed Percentages Estimated.** 2011&2012 Taxable and Assessed Percentages Estimated by the Oakland County Budget Task Force.
Oakland County, MI: Percentage Change in Assessed and Taxable Values
** **
1 Year Study – (used in declining markets)
9-30-200910-1-2008
Valid SaleSold 1-29-2002 $712,000Sold 9-22-2009 $351,000Value Change -$361,000Percentage Change -50.7%
Valid SaleSold 11-22-2002 $181,000Sold 10-16-2009 $125,000Value Change -$56,000Percentage Change -30.9%
Valid SaleSold 7-19-2006 $270,000Sold 9-2-2009 $130,000Value Change -$140,000Percentage Change -51.9%
Y-12-36-151-012 20-23-27-328-01408-19-36-177-018
RES
IDEN
TIA
LA
ssessed
Valu
e
Addison Township -15.45%Bloomfield Township -15.28%Brandon Township -18.26%Commerce Township -14.22%Groveland Township -24.15%Highland Township -13.90%Holly Township -15.19%Independence Township -16.37%Lyon Township -17.33%Milford Township -18.01%Novi Township -11.37%Oakland Township -14.69%Orion Township -12.80%Oxford Township -14.33%Rose Township -22.40%Royal Oak Township -16.96%Southfield Township -14.65%Springfield Township -15.28%Waterford Township -23.05%West Bloomfield Township -18.20%White Lake Township -20.63%Auburn Hills -18.66%Berkley -11.98%Birmingham -9.95%Bloomfield Hills -7.78%Clarkston -16.06%
Clawson -13.22%Farmington -16.71%Farmington Hills -16.60%Fenton -14.27%Ferndale -15.92%Hazel Park -19.71%Huntington Woods -13.72%Keego Harbor -16.64%Lake Angelus -15.12%Lathrup Village -23.08%Madison Heights -21.84%Northville -14.12%Novi City -12.83%Oak Park -23.23%Orchard Lake -15.35%Pleasant Ridge -15.56%Pontiac -20.82%Rochester -11.70%Rochester Hills -12.70%Royal Oak City -15.03%Southfield City -28.31%South Lyon -11.56%Sylvan Lake -15.02%Troy -15.46%Walled Lake -16.96%Wixom -15.53%
Valid SaleSold 11-22-1996$16,000,000Sold 4-24-2009$12,300,000Value Change -$3,700,000Percentage Change -23.1%
Valid SaleSold 5-22-2002 $4,100,000Sold 3-22-2008 $3,000,000Value Change -$1,100,000Percentage Change -26.8%
88-20-17-200-02672-25-14-127-06020-23-34-355-002
Valid SaleSold 11-29-2004 $220,000Sold 9-30-2009 $145,000Value Change -$75,000Percentage Change -34.1%
Addison Township -11.76%Bloomfield Township -10.60%Brandon Township -11.35%Commerce Township -13.69%Groveland Township -13.96%Highland Township -15.12%Holly Township -18.36%Lyon Township -18.39%Milford Township -13.28%Novi Township NAOakland Township -16.06%Orion Township -15.96%Oxford Township -17.39%Rose Township -18.13%Royal Oak Township -15.69%Southfield Township -17.14%Springfield Township -15.12%Waterford Township -9.89%White Lake Township -14.31%Auburn Hills -16.71%Berkley -12.21%Birmingham -12.64%Bloomfield Hills -14.84%Clarkston -14.09%Clawson -11.67%
CO
MM
ER
CIA
LA
ssessed
Valu
e
Farmington -13.57%Farmington Hills -9.22%Fenton NAFerndale -12.52%Hazel Park -17.54%Huntington Woods -11.99%Keego Harbor -11.74%Lake Angelus NALathrup Village -12.57%Madison Heights -15.32%Northville -12.29%Novi City -9.18%Oak Park -13.45%Orchard Lake -11.57%Pleasant Ridge -11.84%Pontiac -17.97%Rochester -16.71%Rochester Hills -14.36%Royal Oak City -7.63%Southfield City -8.18%South Lyon -12.87%Sylvan Lake -11.93%Troy -17.45%Walled Lake -12.81%Wixom -10.28%
Valid SaleSold 7-14-2004$1,400,000Sold 5-1-2008 $978,350Value Change -$421,650Percentage Change -30.1%
Valid SaleSold 4-1-1998 $941,000Sold 2-28-2008 $575,000Value Change -$366,000Percentage Change -38.9%
02-14-35-228-014 96-22-08-200-034
Valid SaleSold 12-10-2003$4,852,000Sold 12-5-2008$1,800,000Value Change -$3,052,000Percentage Change -62.9%
02-14-23-327-015
Farmington -15.69%Farmington Hills -15.26%Fenton NAFerndale -17.12%Hazel Park -16.62%Huntington Woods NAKeego Harbor NALake Angelus NALathrup Village NAMadison Heights -14.90%Northville -9.53%Novi City -9.43%Oak Park -13.69%Orchard Lake NAPleasant Ridge -12.58%Pontiac -17.94%Rochester -13.15%Rochester Hills -14.39%Royal Oak City -8.83%Southfield City -11.88%South Lyon -15.82%Sylvan Lake -11.26%Troy -17.36%Walled Lake -14.18%Wixom -9.18%
IND
US
TR
IAL
Assessed
Valu
e
Addison Township -11.92%Bloomfield Township -17.70%Brandon Township -7.65%Commerce Township -15.38%Groveland Township -13.21%Highland Township -15.72%Holly Township -16.15%Lyon Township -16.64%Milford Township -18.79%Novi Township NAOakland Township -13.10%Orion Township -16.03%Oxford Township -14.94%Rose Township -18.32%Royal Oak Township -16.62%Southfield Township NASpringfield Township -16.58%Waterford Township -9.97%White Lake Township -14.30%Auburn Hills -18.80%Berkley -12.77%Birmingham -12.47%Bloomfield Hills NAClarkston NAClawson -14.09%
2007 Taxable Value $209,5402007 Property Taxes $6,289
2010 Taxable Value $132,6102010 Property Taxes $3,978
Change in Property Taxes -$2,311Change in County Revenue -$325
2010 Taxable Values Estimated.
2009 Taxable Value $134,7402009 Property Taxes $4,042
2010 Taxable Value $134,3302010 Property Taxes $4,029
Change in Property Taxes -$13Change in County Revenue -$1
2010 IRM of -0.3% will cause properties similar to this example to lower the Taxable Value even if there is a gap between SEV and TV.
2010 Taxable Values Estimated.
2007 Taxable Value $ 275,9502007 Property Taxes $13,797
2010 Taxable Value $199,3602010 Property Taxes $9,968
Change in Property Taxes -$3,829Change in County Revenue -$543
2010 Taxable Values Estimated.
2009 Taxable Value $988,9102009 Property Taxes $49,445
2010 Taxable Value $985,9402010 Property Taxes $49,297
Change in Property Taxes -$148Change in County Revenue -$21
2010 IRM of -0.3% will cause properties similar to this example to lower the Taxable Value even if there is a gap between SEV and TV.
2010 Taxable Values Estimated.
1,192% increase in the number of Sheriff Deeds from 1998-2008
1 in 597 1 in 539 1 in 5321 in 377
1 in 2531 in 225
1 in 212
1 in 174
1 in 97
1 in 62
1 in 51Oakland County
11-18-09
1 in 60
2009
Tot
als
Estim
ated
As
of 1
0-31
-09
Monthly % Quarterly %2006 2007 2008 2009 CHANGE CHANGE
January 391 758 948 537 -43.4%February 308 483 666 899 35.0%March 360 591 741 513 -30.8%
TOTAL 1ST QTR 1059 1832 2355 1949 -17.2%
April 344 529 968 581 -40.0%May 464 585 792 691 -12.8%June 343 666 772 940 21.8%
TOTAL 2ND QTR 1151 1780 2532 2212 -12.6%
July 332 683 865 848 -2.0%August 482 646 745 548 -26.4%September 427 624 850 582 -31.5%
TOTAL 3RD QTR 1241 1953 2460 1978 -19.6%
October 558 743 767 790 3.0%November 436 752 636 732 15.1%December 436 583 492
TOTAL 4TH QTR 1430 2078 1895 1522
GRAND TOTAL 4881 7643 9242 7661
AUBURN HILLS 1 in 59
BERKLEY 1 in 77
BIRMINGHAM 1 in 53
BLOOMFIELD HILLS 1 in 82
CLARKSTON 1 in 43
CLAWSON 1 in 67
FARMINGTON 1 in 82
FARMINGTON HILLS 1 in 73
FENTON NA
FERNDALE 1 in 44
HAZEL PARK 1 in 28
HUNTINGTON WOODS 1 in 117
KEEGO HARBOR 1 in 46
LAKE ANGELUS NA
LATHRUP VILLAGE 1 in 36
MADISON HEIGHTS 1 in 45
NORTHVILLE 1 in 79
NOVI CITY 1 in 91
OAK PARK 1 in 35
ORCHARD LAKE 1 in 84
PLEASANT RIDGE 1 in 252
PONTIAC 1 in 38
ROCHESTER 1 in 77
ROCHESTER HILLS 1 in 81
ROYAL OAK CITY 1 in 74
SOUTHFIELD CITY 1 in 32
SOUTH LYON 1 in 62
SYLVAN LAKE 1 in 83
TROY 1 in 106
WALLED LAKE 1 in 53
WIXOM 1 in 82
ADDISON1 in 92
VILLAGE OF LEONARDBLOOMFIELD 1 in 82BRANDON
1 in 72 VILLAGE OF ORTONVILLE
COMMERCE 1 in 75 VILLAGE OF WOLVERINE
LAKEGROVELAND 1 in 116HIGHLAND 1 in 67HOLLY TOWNSHIP
1 in 46 VILLAGE OF HOLLYINDEPENDENCE 1 in 70LYON TOWNSHIP 1 in 117MILFORD TOWNSHIP
1 in 80 VILLAGE OF MILFORDNOVI TOWNSHIP NAOAKLAND TOWNSHIP 1 in 102ORION TOWNSHIP
1 in 67 VILLAGE OF LAKE ORION
OXFORD 1 in 82ROSE
1 in 46 VILLAGE OF OXFORDROYAL OAK 1 in 58SOUTHFIELD
1 in 86 VILL OF BINGHAM FARMS
VILL OF FRANKLIN
VILL OF BEVERLY HILLS
SPRINGFIELD 1 in 78WATERFORD 1 in 48WEST BLOOMFIELD 1 in 62WHITE LAKE 1 in 63
Community Sheriff Deed totals estimated as of 11-18-09.Community Sheriff Deed totals estimated as of 11-18-09.
http://www.michigan.gov/documents/treasury/Bulletin6of2007_205860_7.pdf
Bulletin 6 of 2007Guidelines for Foreclosure Sales
Sheriff deeds are never included in sale studies. Bank sales to private individuals are to reviewed in accordance to these
guidelines.
• Can be accurately estimated by May• Median Method
• 2010 Actual IRM: -0.3% or 0.997
(IRM) Inflation Rate Multiplier = For property tax year 2010, the inflation rate multiplier is equal to the ratio of fiscal year 2009 average consumer price index divided by the fiscal year 2008 average consumer price index.
Prior Year Current Year
Month 10/07-9/08 10/08-9/09
Oct 208.936 216.573
Nov 210.177 212.425
Dec 210.036 210.228
Jan 211.08 211.143
Feb 211.693 212.193
Mar 213.528 212.709
Apr 214.823 213.240
May 216.632 NA
June 218.815 NA
July 219.964 NA
Aug 219.086 NA
Sept 218.783 NA
Total 2573.553
Median 212.975
Mean 214.463
Estimate 212.975 Divided By 214.463 = 0.993 or -0.69%
Taxable Value Calculations are derived by using
IRM/CPI percentages. This has been
mandated with the introduction of
proposal “A” of 1994. IRM/CPI is calculated
by the US Department of Labor. http://www.bls.gov/c
pi
1995 2.6%1996 2.8%1997 2.8%1998 2.7%1999 1.6%2000 1.9%2001 3.2%2002 3.2%2003 1.5%2004 2.3%2005 2.3%2006 3.3%2007 3.7%2008 2.3%2009 4.4%2010 -0.3%
Taxable Value Calculations are derived by using IRM/CPI percentages. This has been mandated with the introduction
of proposal “A” of 1994. IRM/CPI is calculated by the US Department of
Labor. http://www.bls.gov/cpi
SEV TV Analysis• Oakland County 2008 SEV $74,491,081,562• Oakland County 2008 TV $64,745,976,336
• Oakland County 2009 SEV $67,858,986,149• Oakland County 2009 TV $62,416,676,895
Misconception – a 8% gap between 2009 SEV and 2009 TV will allow TV to increase by at least IRM.
Explanation• Analysis can not be performed as a total. SEV and
TV calculation must be performed on a parcel by parcel basis.
A worksheet with current State Equalized Value (SEV) and Taxable Values (TV) for every parcel in community/county. A simple export of the data out of the BSA Assessing software will provide all the needed starting values. Approximately 95% of the communities in Michigan use BSA Assessing.
Create columns on worksheet with simple formulas to mimic the forces of Proposal “A” on a single parcel’s SEV by classification (i.e. Residential, Commercial, Industrial, etc…)
(1)2010 AV = 2009 SEV
multiplied by Estimated
SEV Change for 2010.
(2)2010 TV = 2009 TV
multiplied by Estimated
IRM for 2010.
(3)2010 Final TV = IF/THEN: If the 2010 AV is less than
the 2010 TV , use the 2010
AV.
(2) (3)(1)
Est. 2010 Commercial Change: -14.0% or .86 Est. 2010 IRM: -.3% or .997
125,090 X 0.86 = 107465
61,580 X 0.997 = 61,395
If (1)>(2), then chose (2), otherwise chose (1).
PIN Class 2009 AV 2010 AV 2009 TV 2010 TV 2010 Final TV
14-08-20-252-007 201 $125,090 $107,577 $61,580 $61,395 $61,395
Exported Exported Exported Exported Create CreateCreate
Oakland County Parcels where SEV=TV• In 2008 for 2009 45% of the County’s Res Parcels• In 2009 for 2010 65% of the County’s Res Parcels• In 2010 for 2011 80% of the County’s Res Parcels
(Estimated)
65% of the Res parcels SEV=TV may lose an average SEV of 15%. Prop “A” forces these parcels to also lose an average TV of -15%.Commercial and Industrial may lose an average of -14.5%.
35% of the Res parcels are required to decrease in TV by the IRM.IRM for 2010 is -0.3%.
-13% EST TV change for 2010*2010 Residential Values estimated at -15% and the Commercial and Industrial Values are estimated at -14.5%.
• 480% Increase in Taxable Value (totaling $2.8Billion) under appeal at the Michigan Tax Tribunal from 2008 to 2009.
• Currently there is $11.4 million in total tax dollars under appeal against the county operating millage (Major Appeals).
• Personal Property has seen a -5.5% decrease in Taxable Value between the years of 2005 to 2009.
• The number of building permits issued between the years of 2005 to 2009 have fallen by -95%.
o 2008 Estimate of Taxable Value was $64,467,600,000
o 2008 Actual Taxable Value is $64,745,976,336
o 2009 Estimate of Taxable Value was $62,479,867,000
o 2009 Actual Taxable Value is $62,416,676,895
o 2010 Estimate of Taxable Value is $54,302,508,000
• Tax Tribunals will reduce this Taxable Value difference further during the course of 2009 and 2010.
Residential Sales between 10-1-09 to 11-20-09426 Sales: 54.77 ratio (-9.1%) against proposed 2010 values.
10-1-2009
9-30-2010
1 Year Sales Study Period for 2011
12-1-2009
o When comparing sales prices on the current sales, we discovered that the market is still dropping at a similar rate compared to last year at this time. We will continue to analyze the market conditions monthly and make modification to our Taxable Value estimate accordingly.
80% of the Res parcels SEV=TV may lose an average SEV of -15%. Prop “A” forces these parcels to also lose an average TV of -15%.Commercial and Industrial may lose an average of -20%.
20% of the Res parcels have the ability for the parcels to increase in TV by IRM.IRM for 2010 is 2.3%.**
-12.5% EST TV change for 2011
*2011 Residential Values estimated at -15% and the Commercial and Industrial Values are estimated at -20% CPI estimated at 2.3%.** IRM was generated by averaging the IRM from 1995-2009. The actual 2011 IRM can not be calculated due to lack of data.• Oakland County Budget Task Force estimates -5% in Taxable Value for 2012 (subject to modification based on changing market conditions).
Oakland County Parcels where SEV=TV• In 2008 for 2009 45% of the County’s Res Parcels• In 2009 for 2010 65% of the County’s Res Parcels• In 2010 for 2011 80% of the County’s Res Parcels
(Estimated)
2007 Countywide True Cash Value$154.6 Billion
2009 Countywide True Cash Value$135.7 Billion
Change in TCV -$19 Billion
2011 Countywide True Cash ValueEstimated $96.3 BillionChange from 2007 to 2011
Change in TCV -$58.3 Billion or -37.69%
All communities should have access to this data in their assessing system for creating this estimate.
Reviewing market trends is crucial in predicting future tax base (declining sales, increasing foreclosures, etc…)
Modification to estimate as more data becomes available.
2010 Oakland County Taxable Value = -13% 2011 Oakland County Taxable Value = -12.5% 2012 Oakland County Taxable Value = -5%*
*2012 Taxable Value estimate assumes we have hit the bottom of the real estate market in 2011.
