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Values fall, but taxes don't

Real estate values have dropped 5 percent from a year ago, but don't expect property taxes to decrease anytime soon.

Only if the market value of an average home fell below its assessed value could the change be reflected on property taxes, according to state law.

The Jackson County Assessor's Office has determined that the average real market value in urban areas is $308,000 and the assessed value — the amount used to calculate taxes — is about 48 percent of that, or $149,000. Property values would have to drop by more than 48 percent on average before homeowners would see taxes drop.

Except for new construction, fluctuations in the real estate market generally don't affect property taxes, thanks to Measure 50, which became law in 1997.

"If everybody's house value dropped 20 percent, the amount of property tax is going to stay the same," said Medford real estate appraiser Roy Wright. "If it goes up 20 percent, it will remain the same."

On new construction or on recently created subdivisions, the downward trend in real estate values has ruffled some property owners who discovered the real market value on their tax bills was higher than they anticipated.

Jackson County Assessor Dan Ross said 300 out of almost 100,000 property tax statements were appealed in 2007 compared with about 160 the year before. Prior to Measure 50, when real market value was used to calculate taxes, Ross said the county received 2,000 to 3,000 appeals annually.

Ross said a majority of the recent appeals came from developers whose subdivision properties might not be worth as much as a year ago. In 2006 and the early part of 2007, lots were going for about $150,000, but that has dropped to about $100,000 now, he said.

The assessor's office determines the real market value in January based on market conditions the year before. By the time a property owner gets a tax statement, 10 months have elapsed and market conditions may have changed markedly.

"The sad thing about it is it's just a timing issue," said Ross. "It's unfortunate they don't see the tax bill until October."

The median home price in urban areas dropped 5 percent overall for the year, but Wright said he has seen a continued weakening in the real estate market as time goes by. In December 2007, the median price dropped 12 percent compared with the same month in 2006.

In Jackson County, the two cities that bucked the trend were Talent and Jacksonville, which posted slight gains.

Wright said the assessor's office often gets it right when it appraises properties, but sometimes it doesn't.

He said he defended an Ashland couple last year when their home was appraised by the county at $1.2 million, but they insisted the property was worth less because nothing else in the neighborhood was selling for that amount. "The county just blew them off," he said.

After an extensive appeal process, the couple successfully reduced the appraisal by $300,000, he said.

The assessor's office sent out 132 corrected tax statements in December for three White City subdivisions after it was discovered they had been appraised too high.

Wright said lots of people like to complain about how high property taxes are in the state.

"All of the property tax in Oregon was voted on by the public," he said. "The voters don't have anyone else to blame."

Reach reporter Damian Mann at 776-4476 or dmann@mailtribune.com.

Values fall, but taxes don't