Brian Vanderhoff's North Fulton Real Estate Blog

The neighbors in Parkview noticed a lot of people coming and going from a house on Eleanor Street in an unincorporated portion of DeKalb County.

They assumed they were renters.

They were squatters or by-the-room renters paying someone who did not own the house.

As in Parkview, near I-20 east of downtown Atlanta, several parts of metro Atlanta are witnessing people moving into foreclosed and empty houses and taking over the properties.

“It’s not uncommon,” said Ron McNew, an agent with Prudential Georgia Realty who specializes in foreclosed properties.

McNew said he recently discovered several people were paying “some guy” $300 a month to rent a room in a house near Turner Field that McNew was trying to sell.

“Never did find him,” McNew said of the purported landlord. “People living there believed they were paying rent for real.

“This whole real estate market is inside out. All the old rules don’t apply anymore,” McNew said.

It’s only been in recent weeks that Parkview homeowners realized what had happened to their streets.

A real estate agent trying to sell the about-to-be foreclosed property discovered squatters had taken over the house.

“Nobody really knew what to do,” said Chad Mercer. “They [neighbors] had no idea these guys were renting these places out by the week. They broke in and … changed the locks on 377 Eleanor, cut the grass, [had turned on the] water and [were] illegally getting power.”

Around the corner were three more houses where people had just moved in, neighbors said.

Dee Giarratano said that by then the squatters were “attracting a real bad element, druggies and prostitutes” to their otherwise quiet streets.

Foot and car traffic had picked up and the residents at those houses seemed to change constantly.

“It seems as the economy has gone south there has been a proliferation of undesirable activity,” Giarratano said.

Homeowners called police several times. Patrols were increased but there was little more that could be done to move them out.

Mekka Parish, spokeswoman for the DeKalb Police Department, said the Parkview neighborhood problem was one “we see throughout the community”

To address it, code enforcement officers must first find the owners, Parish said. If and once they are found, the owner must have adequate time to correct the problem before the matter can be taken to court. Then the owners must file a complaint for police to respond.

DeKalb police are still trying to contact the owners of the four properties in the Parkview neighborhood.

The Atlanta Journal-Constitution’s attempts to reach the owners listed on property records for these four houses also were unsuccessful Friday. Calls either went unanswered, went to a fax line or the number had been disconnected.

There is no record of how often people simply move into vacant houses or rent out space in them. The details are anecdotal, coming from neighbors and real estate agents who visit the properties.

Even before he first reported squatters in the house on Eleanor Street, Mercer said he had witnessed squatters taking over houses near properties he was renovating in the Vine City and English Avenue neighborhoods near the Georgia Dome.

“It’s rampant over there,” Mercer said. “And in Reynoldstown, Ormewood Park, Summerhill. Where ever there is a larger degree of foreclosures.”

Steve Ruff and his wife would watch from their front porch the comings and goings at two houses across Liberty Street in DeKalb County.

“I assumed they were renting the rooms out by the week,” he said. “Then you find out they are squatting. This guy broke in and put [new] locks on the doors. The company that owns it is out of Texas.”

Labels: dekalb county, squatters, vacant homes

Tax assessors across Atlanta’s five core urban counties say homes and businesses lost almost $5 billion in real estate value last year due to the continuing recession.

That’s right, billion.

Still, property owners in Clayton, Cobb, DeKalb, Fulton and Gwinnett counties are complaining that assessors haven’t gone nearly far enough to account for a real estate slump that has houses in some communities for sale at less than the price of a decent used car.

R.J. Morris, an investor in rental real estate, said assessors dropped the tax value on a rental home he bought last year in East Point from $137,800 to $107,000 — a 22 percent decline. However, he paid just $5,000 for the house in late 2008.

“It’s obvious all they did was say they are going to take [some random percentage] off,” Morris said. “In 2008, that’s when we really drove off the cliff. It was definitive. There is no way you can say values didn’t go down. Anything south of I-20, values have just been destroyed.”

The losses are being recorded now as assessors prepare their tax digests and submit values to the state and local governments that will use them to collect 2009 taxes. Assessors in the five urban counties have or will send about 350,000 notices lowering taxable values for 2009.

And when values fall, governments struggle unless they raise tax rates to compensate. Numerous school systems, cities and counties across metro Atlanta have been debating tax increases and service cuts over the past several months. Tax digests also give a glimpse into the state of the economy, real estate markets and development.

They catalog changes in value, new construction, expansion and property divisions.

For example, in 2008 the same five counties counted a nearly $23 billion increase in real estate values even thought it was a down year. So, for assessors, any kind of drop in value is a dramatic change.

“In my 30 years assessing in Georgia, this is the first time I’ve seen anybody’s digest go down,” said Steve Pruitt, chief appraiser for Gwinnett. “The market has always been flat or increasing. We’ve not ever seen an appreciable devaluation. This is the first really mass effect I’ve seen.”

The greatest drop by percentage is in Clayton, where assessors reported real estate values fell by $1.2 billion, or 6 percent. The greatest dollar drop came in DeKalb, where assessors cut $2 billion in taxable value from the county’s digest.

And, even though Clayton cut properties by the greatest proportional amount by far, the county still got slammed with nearly 6,000 appeals from property owners who say it should have done more.

Rodney McDaniel, Clayton’s chief appraiser, said the appeals are the greatest number he can remember getting, even with his county’s aggressive efforts to lower values.

“We got hammered,” McDaniel said. “I’m not going to lie. I thought we were pretty fair. Naturally, not everyone’s going to agree with us.”

Cobb and Fulton both reported drops of about 1 percent in real estate values. However, chief appraisers in both counties said large drops in residential values were offset by increases in commercial values, new construction, additions and property divisions.

Burt Manning, Fulton’s chief appraiser, said Fulton has sent or will send about 130,000 notices to residential property owners that will lower values by a total of $2.75 billion, an average of about 12 percent.

The digest, he said, also had about $600 million in losses among some commercial properties.

However, he said, there was about $3 billion in growth from other parcels, netting Fulton a $300 million loss.

“I’m surprised by how much new parcels and new growth we added,” Manning said.

The biggest controversies over assessments so far have been in Cobb and DeKalb.

In Cobb, legislators sent a letter of protest to the Department of Revenue complaining that thousands of taxpayers will pay more than they should in property taxes because assessors there are lowering only about 20,000 or 30,000 parcels, the fewest in metro Atlanta.

DeKalb actually sent two rounds of notices after admitting the first lowered only a handful of values because assessors failed to count foreclosures and distressed sales even though state law required them to do that.

The new round of notices, sent in May, lowered five times as many properties but still didn’t stop the county from being sued.

And the county racked up more than 8,300 appeals for an appeal period that ended Friday.

John Woodham, the lawyer who filed the lawsuit, said he suspects DeKalb’s 3 percent drop would be much greater but assessors were reluctant to cut appraised values as low as bank-owned sales dictate.

He said there are dozens of neighborhoods where houses are priced in the range of $20,000 to $30,000, but tax appraisals average three times as much even after being lowered this year.

“You can’t just take last year’s overly inflated number and hack off 20 percent,” he said. “That’s not statutory. They are required to get to fair market value.”

Labels: Atlanta, clayton county, dekalb county, Fulton, Gwinnett, property values, take a hit

There’s no question tax assessors across metro Atlanta have reacted to the continuing real estate collapse. When Fulton County mails out notices June 5, the five major counties will have dropped values for more than 350,000 parcels.

The question taxpayers must now decide is, “Have they gone far enough?”

That’s the central issue in a lawsuit filed last week challenging DeKalb County’s efforts to set 2009 values. The county sent out about 30,000 bills in April, less than half reductions.

Officials admitted they did not include foreclosures in their calculations even though a new state law mandated their consideration. They also raised values for some parcels even though a different state law froze values for three years.

So, last week they redid their calculations and sent out 95,000 notices, this time following the dictates of both new state laws. Hank Ruffin, DeKalb’s interim chief appraiser, said at least 40,000 properties will fall by more than 25 percent.

Still, local lawyer John Woodham filed a lawsuit challenging 2009 taxable values for DeKalb County.

“There’s no way they could have done all that work in three weeks,” said Woodham. “They say the tax digest went down 4 percent. It’s probably at least 12 percent. I don’t think that’s a reasonable number.”

John O’Callaghan, CEO of the Atlanta Neighborhood Development Partnership, agreed. His local nonprofit did a study earlier this year of values in high-foreclosure neighborhoods across the five major metro counties and found the sales prices were often a fraction of their tax appraisals.

The study found median sales prices in three high-foreclosure ZIP codes in south DeKalb were on average 57 percent of the tax appraisal. The same study found ZIP codes in Clayton and Fulton where median sales prices were half or less of the median taxable values. Two Fulton ZIP codes had median sales prices in the $20,000 range but median tax values five times as high.

“It’s seems unlikely you’ll see values set at the levels they should be,” O’Callaghan said.

The continuing real estate crisis certainly has sent assessors scrambling to catch up and understand.

Sales volumes are dramatically down. Foreclosures and increasing rapidly. Distressed sales are becoming the market in many places. For many values are falling. Some pockets are holding their own.

Assessors say all those factors make setting 2009 values extraordinarily difficult. The system of mass appraisal, assessors agree, is designed to make gradual changes year to year and struggles during times of dramatic, swift change. Normally, prices go up each year, allowing assessors to follow a consistent pattern.

But this year, few of the normal patterns hold true. Values in some places values have collapsed under the weight of foreclosures and distressed sales. A computer search for metro Atlanta Friday returned 177 properties for sale at $10,000 or less.

“It really throws several monkey wrenches in the way we normally do things,” Burt Manning, chief appraiser for Fulton. “With some of these low-priced sales, we don’t know has the plumbing been ripped out. Is the air conditioner gone. That’s why we are truly struggling with how low do we go.”

Fulton expects to be the next major metro county to send out revaluations. Plans are to mail about 105,000 notices on June 5. About 95,000 will lower values, Manning said.

Still, Manning said he expects to get complaints that he hasn’t gone far enough. He agreed the department isn’t likely to value homes across wide parts of south and west Atlanta in the $20,000 to $30,000 range.

Property owners who feel their values are still too high have the right to appeal, as long as they got a revaluation notice this year.

But even appeals have a new twist this year as well — an optional appeal system using binding arbitration rather than an appearance before a Board of Equalization.

With the tax system in so much turmoil, assessors say they have no way to predict how many folks will accept their lower values or choose to contest them or choose arbitration versus the traditional system.

In Clayton, where appeals must be filed by June 8, the county’s already taken in 1,800 appeals. However, that’s against 70,000 notices. Clayton lowered the values on nearly 80 percent of its parcels, the most in metro Atlanta.

Rodney McDaniel, chief appraiser in Clayton, said normally the county gets a last-minute flood of appeals, but this year he’s uncertain what will happen next.

Woodham, though, said the actions by assessors should be simple and clear. If sales are consistently in the $20,000 range, then tax values should match those numbers.

“It’s a new world,” Woodham said. “I don’t think they hesitated to raise values the last five years. Their state mandated duty requires these movements downward.”

Labels: dekalb county, drop, five counties, Fulton County, Georgia, tax assessments

DeKalb County’s efforts to correct its tax values for 2009 roll out today with the mailing of about 100,000 tax revaluations — this time taking foreclosures into account.

Tax officials say the do-over will benefit thousands of property owners across the county who will see their county tax appraisals, and possibly their tax bills, fall in reaction to the ongoing real estate slide.

DeKalb’s first mailing, last month, did not include distressed sales despite a new state law requiring that such sales be used in setting values for 2009.

The first mailing, tax officials said, lowered values on about 13,500 parcels. This one will drop the assessments on 95,000.

“The number of sales we included in our sales ratio studies doubled when we included distressed sales,” said Hank Ruffin, interim chief appraiser.

Ruffin said at least 40,000 properties will fall by more than 25 percent.

“It’s safe to say the southern part of the county took the biggest hit,” Ruffin said. “The northern part was not affected as much. That’s no surprise.”

The work completed by DeKalb assessors over the past 30 days has sliced the county’s tax digest by more than $1 billion and means local governments across DeKalb will be forced to account for lower values in setting their tax rates for 2009-10.

Also, the new values will land this week in the hands of wary residents, some of whom got notices last month they felt didn’t go far enough and more whose property values didn’t get lowered but felt they should have.

“I’m concerned and skeptical,” said Trey Glover, who lives in East Atlanta. “I really don’t think they are going to be sending me anything. But they should. If they don’t send me a notice, I’m going to be overpaying.”

Glover did not get a notice from DeKalb when assessors mailed out about 28,000 notices for 2009 last month. The county has his home valued at $350,100. Glover said he’s been trying to refinance, and banks say it’s worth about $50,000 less. He has no right to challenge the value unless he gets a notice in this round.

“The banks obviously think the values have come down,” Glover said.

For those who do get notices, they next must decide whether DeKalb assessors accurately reflected the market as of Jan. 1 or failed to lower taxable values enough. Those who don’t likely will appeal and challenge the county to lower values even more. Appeals must be filed by June 19.

Ruffin noted the new mailing includes no reappraisals increasing values unless the property was changed. The first batch included several thousand increases despite another state law banning such changes until 2012.

Everyone who got a notice the first time will get a notice this time, Ruffin added. Those who have already appealed the first notice can drop their appeal after getting the new notice or continue to fight, Ruffin said.

The new mailing puts DeKalb much more in line with Georgia’s other major counties. DeKalb, Gwinnett, Fulton and Clayton have now sent out, or soon will, more than 70,000 notices dropping the values.

Cobb plans to mail out more than 20,000 notices lowering values on Friday. Phil Hogsed, chief appraiser, could not be reached to explain why the county’s numbers were so different than its neighbors. However, he had previously said Cobb would consider foreclosure activity in its 2009 notices.

Labels: dekalb county, Georgia, lower assessment, tax assessment