High Home Valuation in Tennessee despite Foreclosed Homes

Despite large numbers of foreclosed homes in Tennessee communities, home valuations have increased by significant percentages, according to homeowners questioning the valuations of their homes.

This year, as 20 of the state’s 95 counties are undertaking home reappraisals, many homeowners have been asking the basis of their reappraisals. In counties like Loudon, Rhea, Bradley, Hamilton and Van Buren, homeowners are wondering why their residential properties are getting valuation increases by 30 percent or higher.

A homeowner in Spring City has claimed that the value of his property has increased by almost 79 percent. He argued that the valuation is perfect if he can sell it or refinance it at that price, but he could not. He is frustrated that the appraisers are ignoring the loss of home values all around because of the bargain prices of foreclosed homes.

But Julene Purser, property assessor of Rhea, insisted that the reappraisals were based on land sales in 2008, when land values stayed strong despite a significant decrease in sales.

Many homeowners are confused because all they hear are steep price home declines, bargain foreclosed homes, deterioration of home values, underwater loans, rejection of refinancing because of low valuations and walk-outs from mortgages because of low house values, and yet their houses are valued differently just to raise tax revenues.

In response to the taxpayers’ complaints, Tennessee officials explained that some counties in Tennessee did not experience the effects of foreclosed homes as severely as in other counties.

According to Tennessee tax assessment law, county legislative bodies must vote to use new tax rates when their counties are up for reappraisal. They must base their real estate tax rate adjustments on the certified tax rate table issued by the state.

David Sherrill, director of real estate assessments, explained that the tax rate table would make tax rate revenue neutral. He said that if residential property values increase, tax rates should decrease.

State official Kelsie Jones told homeowners that they are given 45 days to submit their appeals after they receive their reappraisal change notices from their counties.

A responsible resident of Van Buren County told county officials that he understands why home values should be adjusted and why revenue should be increased, but he explained that he cannot accept an increase of nearly 40 percent in just three years, especially in a recession year and in a time of thousands of bargain-priced foreclosed homes.

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