The Daily Paper had one of those business page stories by Joe Estrella that left us scratching our heads Friday.
Seems a bank economist told legislators the Treasure Valley has an unsold inventory of 7,000 homes and it will take a 15% drop in prices to get the housing market back on track.
Since Idaho’s property tax is based on “fair market value” of property, it is logical to talk to the bank economist. He also said prices dropped 7% in November with the median home price at $215,000. Good so far.
Then, a blogger dude with a site called BUILDINGCREDIBILITY claims many previous loans were for more than the value of the property and owners are now “upside down.” This is a concern for all property owners, because the Ada Assessor uses those sales figures–in part–to establish “fair market value” for the rest of the folks on the block.
Here is where it gets scary. The top dude at the Ada County Association of realtors came up with this brilliant conclusion:
“A 15% price reduction is not a 15% reduction in the value of the house. It’s a reduction in what they’re getting for the house.” He has obviously dealt with too many “motivated buyers.”
It sounds laughable of course, but the data from realtors like the Ada realtor goes into the equation that ultimately determines the taxable value of our homes.
We need a mandatory reporting of actual sales prices of homes if Idaho is going to remain using the “fair market value.” Bonner and Kootenai counties are currently considering ordinances to accomplish that transparency in real estate transactions. About 46 other states require mandatory reporting.
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