$250K Worth of Grey Paint? (home, price, reassessment)

[erieguy]

Originally Posted by SteelCityRising

Dormont would explode if the city annexed it because the property taxes would decrease. It would be sited within Pittsburgh Police Zone 6, which is one of the better zones, too. I don't think the city schools that Dormont would feed into would be that much worse than Keystone Oaks.

I agree, but unlikely to happen and as it stands right now the taxes are ridiculous.

[Doowlle34]

The idea of Pittsburgh annexing Dormont seems to have made some strange bedfellows here on city-data. I definitely do not want debate that issue with these two posters. SRC, on the one hand, holds his convictions passionately, writes incredibly well, and has a command of the relevant data. And Erieguy, for his part, frequently channels Balki Bartokomous in his arguments ("Don't be ridiculous, Cousin Larry"). Not going there.

That said, in a previous post, I referenced a Dormont house that sold in June 2018 for 335k. When I checked the assessment back in March, I recorded that it had only been reassessed at $211k, which seemed a little low. Now that I check the house again, it appears to have been reassessed at $292k, which seems to confirm some of the worst concerns mentioned here. (Not sure if I just looked at the numbers wrong back in March, or if, perhaps, the homeowner "won" on the first level appeal, but lost on the second.) Not sure how we encourage this re-development of homes and in-flux of new residents, without making the taxes prohibitively expensive. I would love to see some "cap" on what I single family home owner could pay a year in taxes, but it doesn't seem like the school district cares about this, or further, that there is any large constituency for such a policy (but for, likely, the handful of folks who are buying these houses and getting whacked with reassessments).

[Copanut]

What kills me about Dormont is the 9.97 millage rate for the Boro. It's usually the more distressed areas that have a rate that high. East Pgh at 13, North Braddock at 11, and the winner Wilkinsburg at 14. Not sure how they justify that, they have so many other tax streams.

As to the house in question that sold for 335K, it's right on the mark at 292K, 87% of sale price.

[svband76]

Originally Posted by Doowlle34

Bumping this thread again for yet another Dormont rehab. This one looks more likely than the other to fetch this initial asking price. The rehab here represents what appears to be a very efficient turnarnound, with the rehabber purchasing the home from a bank for around 145k in just March 2019.

https://www.realtor.com/realestatean...6_M46790-50764

UPDATE: House is pending sale. 5 days after listing. Oh well... Nice place.

[Tallysmom]

Originally Posted by SteelCityRising

I'm so sorry to read this since so many people are opening up the first floors of historic/older homes. Is it more difficult to "un"-open concept something than it is to open concept it?

No, it’s easy to rewall. They usually don’t open a load bearing wall, although it can be done for $$. All a wall is is 2x4 framing, 16 inches on center and drywall. Tape and mud and paint. Now — trim may be an issue. You might be able to use various trim to match your trim, or you may have to take off a piece of trim and have more milled.

If you can swing a hammer, you can put up walls.

[guy2073]

Originally Posted by Tallysmom

No, it’s easy to rewall. They usually don’t open a load bearing wall, although it can be done for $$. All a wall is is 2x4 framing, 16 inches on center and drywall. Tape and mud and paint. Now — trim may be an issue. You might be able to use various trim to match your trim, or you may have to take off a piece of trim and have more milled.

If you can swing a hammer, you can put up walls.

You are correct. I would rather frame in 100 walls than take down a wall with multiple hvac ducts, electrical and sewer lines.

[Doowlle34]

Just bumping this post again to report that, as far as I can tell, the house that is discussed in the initial post has still not sold -- despite the fact that the price appears to have come down by about $25k.

One issue that occurs to me is that the current real estate tax system in Allegheny County is, arguably, providing an unofficial "tax break" to the property rehabber in this instance. Specifically, if the house had sold in the summer of 2019, the property would have been reassessed and (I believe) the new homeowner would have likely owed (at least) double the amount of taxes that the rehabber will pay this year. In this regard, should (or theoretically could) the school district have any role to play here in "prodding" this rehabber to lower his price to a more reasonable level to facilitate a quicker sale, and thus begin realizing additional tax revenues? Perhaps a new property listing could begin a countdown for the school district -- e.g., if a property is listed for 200% or more of assessed value, the school district will begin a reassessment process within 90 days, even if the property does not sell (perhaps this period could be customized based on the average number of days a property stays on the market in a given area). I assume that, in most cases, the property will sell within the 90 period, and the school district will simply use the sale price for the reassessment. However, in cases like the house in first post, after the 90 days, the school district would move forward with a reassessment -- assuming, based on pictures of the remodel and comparable sales (among other factors), that the new assessment would be, to a reasonable degree of certainty, at least 200% of the current one.

Just tossing this out there for discussion purposes, if anyone is interested.

[Knepper3]

Not really going to look back at the tax details on this home but it's likely not a tax break just an issue resources. It took the county forever to do a reassessment, there is a lot of work involved. The current tax assessment is likely based on the unimproved price and thus fair. The county/school/etc has no basis to raise it unless they do a reassessment on the property. Listing something for sale doesnt mean anything since as you can see that price might be high. I also do not think they can pick a specific home to reassess without justification legally, a sale gives a reason while listing does not.

[Doowlle34]

Knepper - definitely fair comments, and to be clear, I intentionally used the "tax break" comment to be somewhat provocative to stimulate, at least, some discussion. I am just trying to educate myself a bit on this topic, and it seems like a taxing district, like a school district, has the same authority to challenge an assessment as the taxpayer himself. That said, the school district is limited by (among other ways) the uniformity clause of the Pennsylvania Constitution. So, for example, the Pennsylvania Supreme Court recently held (in 2017) that a school district could not selectively target commercial properties for reassessment, notwithstanding the fact that targeting such properties might result in netting more (additional) tax revenues than if the district targeted single family homes. Further, I understand that, in this case, the school district was not targeting commercial properties that had recently sold; rather, it hired a consultant to identify under-assessed commercial properties. I believe this case also involved a Pennsylvania county that had not undergone a countywide reassessment for many, many years, such that assessments were typically way under fair market value.

I also take your point that asking prices are not the same as fair market value -- nevertheless, in most cases, asking prices do have some relation to fair market value. So, in the case of the home in the first post, where the asking price is so out-of-whack with the current assessment (which is $117k), I think it (arguably) makes sense for the school district to take a quick "look see" after the property has sat on the market for a reasonable amount of time. While a full appraisal would be costly, I assume there are tools available to make a spot appraisal in 5 or 10 minutes, which would confirm that this home will very likely to sell for, at least, 230 - 250. So, in these cases -- where the homeowner has indicated his/her intent to sell; where a spot appraisal has indicated that the fair market value is much above the current assessment (I like the target of at least $100k for Dormont); and where the asking price is set at a level that has caused buyers to be scarce for a reasonable period of time -- then the school district should consider moving forward with the assessment appeal.

[Knepper3]

It is very likely not in their interest to bother. You are going to need to hire someone to monitor and analyze every home that gets listed. Then they will need to prepare for a potential fight on any, I know I would, adding more costs. Then in the end they need some proof to back up their assessment which would be what? Hire someone to reassess the home in person? If it ended up selling great you have proof but then its pointless. Do all that then the home reassessment would take effect the next year.
So all that work to get a little more tax money out of them and if the person was trying to sell it is very likely it would be sold before the next year which would have triggered a reassessment anyway without all that work. It is just not worth the effort if someone is trying to sell anyway.