The sad state of residential real estate in Cuyahoga County is the topic of an in-depth Businessweek report today. It comes on the heels of a 60 Minutes segment that aired Sunday highlighting foreclosed and vacant homes in Cleveland.
But Businessweek focuses on yet another harbinger of doom: The county real estate reappraisals that will be conducted during 2012. The county reappraises property every six years.
According to a Federal Reserve report issued earlier this month, property values countywide are expected to drop between 11 and 18 percent. The Feds predict that property in Cleveland will lose 38 to 45 percent of its value, while that in inner-ring suburbs will lose 26 to 30 percent once the reappraisals are done.
If property values decline that much homeowners will benefit from paying less property tax come 2013, but school districts will get the hit—schools derive most of their funds from property taxes.
County fiscal officer Wade Steen, doesn’t believe the Federal Reserve report is correct. But the Fed is sticking with its numbers.
Steen questioned the conclusions because the county lowered its residential values 7.7 percent to $20.4 billion in 2009 and researchers used data from sheriff’s sales and transactions between relatives that are below market value.
“I don’t see any way we’re going to be close to what they’re saying the decline in value is, especially within the city of Cleveland,” Steen said in a telephone interview. “There’s no way that values declined that much.”
Still, many homes are abandoned with no value, Thomas J. Fitzpatrick IV, a Fed economist who co-wrote the report, said in a telephone interview. Also, even after the reappraisal, residents can challenge their valuations, he said.