I have recently received a number of questions about real estate values for next year 2021.
Ohio law requires that my office update the values of every parcel in the county at least once every six (6) years, this is referred to as a Reappraisal. Ohio law also requires, at the mid-point (3rd year) of the six (6) year cycle, that my office conduct an analysis of recent sales of similar properties that have occurred in the county. This analysis of sales at the midpoint of the Reappraisal is referred to as a Triennial Update, which our county is undergoing for tax year 2020, with taxes payable on those values in 2021.
Using expert tools and analysis our office is able to get a clear picture of the impact the housing market is having on our current home values. The analysis of all valid real estate sales is the key to the entire process and a large contributing factor to the overall value placed on each property. The Ohio Revised Code, the Ohio Administrative Code, as well as mandates from the State Tax Commissioner, all play a vital role in this process. For valuation purposes, the State typically mandates a target increase that is reflective of the valid real estate sales that took place in the county over the last three years. Of the 12 Counties that went through this Triennial Update last year the average residential increase was 13.42 percent .
In May of 2019, The Ohio State University, Department of Agricultural, Environmental and Developmental Economics provided projections of what may happen in the Current Agricultural Use Valuation (CAUV) for tax year 2020. It is their expectation that CAUV values will further decline in average to $585, from a current average of $1,155, for a possible negative 49 percent change from 2017. This would only affect the land value and will not result in a total decrease in taxes of 49 percent . Although this information does not come from the Ohio Department of Taxation it does allow us to anticipate a reduction in CAUV taxed properties.
As stated earlier, valid home sales drive market value. We have enjoyed a steady economic upturn over the last decade along with soaring consumer optimism. This boom has fueled a “seller’s” market, resulting in homes that are being purchased for more than their established market value. The old saying “a rising tide lifts all boats” could be applied here. As real estate sales exceed the listed market value, all other similar properties will be adjusted to reflect what the market is dictating.
For example, the Ohio Board of Realtors has just published their January report comparing January 2019 to January 2020. This data shows that the “average” home across the state of Ohio sold for $197,410 during January of 2020. That number is up 15.8 percent from the average $170,476 in January 2019. Zillow shows that the average sale price in January 2017 for residential property was $126,000 and the average sale price in December 2019 was $150,000 which is a 19 percent increase.
If you have any questions feel free to call or stop by the Auditor’s Office. We are located at 101 E. Main St., Eaton. Our phone number is 937-456-8131.
Preble County Auditor