news story / By Ryan Burns

Declining Values

“I don’t think the value is over four-fifty,” he told the Journal after the hearing. “I offered to sell it to ’em. I told ’em, ‘Why don’t you buy the house for four-fifty and sell it for what you think it’s worth? You’ll make $100,000. That’s more than you’ll make collecting taxes in 18 years.’” He shook his head. “They balked at that.” Simpson is clearly upset, not so much at the appeals board as at the banks and mortgage lenders that allowed the bubble to inflate in the first place, and at the opportunistic buyers who took advantage of it. Anyone whose property was assessed at the height of the market, which peaked locally in early 2006, is now literally paying the price for those irresponsible lending practices, Simpson said.

“People were buyin’ houses — they didn’t care what they paid for ’em because they were buyin’ ’em for no money down,” he said, eyebrows raised incredulously. “It would be almost like you go into a casino and [borrow] $200 from them. And if you win money you leave with that. If you lose, you just walk out the door. Basically it’s the same kind of game.”

Mari Wilson, an assistant assessor with the county, said the appeals board has received roughly 150 applications so far this year. It’s the highest number in several years, she said, at least partially because of the declining market. The median selling price of a Humboldt County home in February 2006 was $342,000, and they were selling like hotcakes despite the fact that, according to traditional lending guidelines, only one in 10 residents should have been able to afford that price. Three years later, the median price had fallen 22 percent to $266,500. (Stats courtesy the Humboldt Association of Realtors.) The rise and fall was drastic, but because California tax laws generally keep assessed property values from increasing more than two percent per year, the number of homeowners who actually qualify for a reduced tax rate is pretty small, Wilson said. “Unless they bought in that big surge where value was inflated … it’s not likely that their [tax rate] would be higher than the current assessed value.”

The market has died off so much that even arriving at that value can provide a challenge, as Watanabe noted in her presentation to the appeals board. Sales were so slow by the end of 2007 — when Watanabe was attempting to assess Simpson’s property value — she had trouble finding any comparable homes that sold. “Nothing was moving,” she told the board.

“It’s tough,” Anderson said. “We’ll all admit it’s tough.”

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