Like many South Portland residents, Micah Engber has watched the value of his home steadily rise in the 20 years he has owned it.

Engber paid $67,500 in 1987 for a two-bedroom condominium in the Thornton Heights neighborhood that the city now values at $147,200.

But since 2007, Engber claims the condos in his eight-unit complex on Sunset Avenue are selling for less than the city’s valuations.

So Engber picked up the phone and called Tax Assessor Elizabeth Sawyer.

Engber’s worries about his home value are common in a soft real estate market and tough economy. Many property owners grow concerned that their homes will not hold their values

But Sawyer told the South Portland City Council last week that tax assessments of residential properties are on target, with some exceptions.

“Obviously, everything is a bell curve. There is no way every property is going to be at exactly at fair market value,” Sawyer said.

Mayor Jim Soule had inquired whether homes need to be revalued citywide because of the downturn in the housing market.

Sawyer said her data shows that the city’s valuations are at a median of 96 percent of actual sales prices.

She noted that the number of homes sold from December 2007-March 2008 was down from the same period the year before. But median sales remained “relatively constant.”

Some properties are faring better than others in this buyers’ market, she said.

Properties on or near the water, such as the Loveitt’s Field and Willard Beach neighborhoods, seem to be holding or increasing their values.

Other properties may be faring worse. Engber’s home falls into that category.

Sawyer said that some condominium projects may not be holding their value as well as single family homes.

She also noted that some single-family homes on high-traffic roads are lingering on the market without buyers, or selling for less than their assessed values.

The Sunset Park condominium complex overlooks the Rigby Yard and the site is noisy from the trains roaring by.

“With condominiums, some complexes are fine,” she said. “Others have suffered. In the case of Sunset Park, those units have railroad noise.”

Sawyer told council members at the recent workshop that this condominium complex is a prime example of a property whose value has dropped in the softer housing market.

From 2005-06, condominium units there sold for between $150,000 and $160,000.

During a citywide revalution in 2006, the units were assessed for between $145,000 and $150,000, depending on the individual units.

But in 2007 – with a weaker real estate market – one of the units failed to sell, even though the price was offered at $120,000. It was finally taken off the market.

Another unit in the complex sold in June 2007 for $134,000, after the owner invested $10,000 in improvements that included a new kitchen, appliances and wood floors.

“No one likes when their valuations go up, but the Tax Assessor has to go with the market,” Engber said. “In our case, the worth of the units has fallen off.”

Sawyer said after research and discussions with Engber, she will be lowering the values on the Sunset Park Condominiums.

She has yet to assign a new value to the units.

“In this case the differences in selling prices and assessed valuations are significant enough to make an adjustment,” she said.

Sawyer said she is analyzing all residential property sales from 2007. “Where I see anomalies, I will make adjustments – as I would in any year,” she said.

Sawyer said that just because there may be a difference of $5,000 or $10,000 between a sales price and assessed value does not mean the property needs to undergo a new valuation.

“What is significant is the percentage of the difference on an overall valuation,” she said. “A $5,000 or $100,000 difference on a $130,000 condominium is far different than on a $400,000 home.”

State law allows for deviation in the ratio of up to 10 percent, she said.

Sawyer told the council that the Tax Assessor’s office does not plan to “make wholesale reductions to all condominiums across the board,” which she described as inequitable.

She said many condominiums are fairly priced.

“But if someone brings evidence to me that there needs to be a change in an individual property, I will analyze it and make a change if warranted,” she said.

Engber said he believes that values on condominiums often are weaker in a soft real estate market, because the units attract first-time buyers, retirees or investors looking for rental property.

“These are all groups of people who don’t need to act and buy a home in a bad economy,” he said. “They can delay those decisions.”

Engber said he feels the local real estate market was over-valued in 2005 and 2006, when units in his complex drew higher prices. “It was obvious that these were over-valued,” he said.

Engber said he does not believe that the adjustment Sawyer will make to his condominium complex shows that there needs to be a citywide revaluation.

“It would be crazy to do a full assessment,” Engber said. “People’s taxes would not go down from a citywide assessment. The mil rate would increase.”


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