Property Assessment Reflecting Local Market Conditions

by Simon Lindsay on Foreclosure Rates

It is that time of the year again when values of real estate properties are assessed in order to determine the corresponding tax. But with the foreclosure crisis still affecting most cities, it is not surprising that Kansas City property assessments are also reflecting such unfortunate market conditions.

For the past year, local governments have become concerned about the effects of the growing inventory of foreclosure homes on their tax collection. As you know, tax imposed on assessment of real properties is based on its current market value.

The smaller tax payment may come as a relief to some but in the long run, the entire community will have to suffer from the lack of available funds for maintenance, development and other local government programs.

This is perhaps the reason why most local officials are extending their assistance to troubled homeowners in the form of legal advice and mediation. There are also non-profit groups that have been recently formed with the same objectives – to let these families keep their homes.

Lenders are also encouraged to delay the filing of foreclosure and instead, try to negotiate more manageable mortgage payment terms. Many lenders and homeowners have even agreed to the sale of the distressed property via short sale transaction. This option saves the lender some money in legal fees and allows them to recover some of the loan amount, while the homeowners avoid foreclosure.

Nationwide, foreclosure rates continue to be high. On the average, there is one filing for every 483 homes last May, a 48 percent increase from last year. Total number of filings reached 261,255.

The state of Kansas had the thirty-fifth highest foreclosure rate in the nation last May, with about 1,756 homes entering some stage of foreclosure. Last year, the number of foreclosure filings was 58.89 percent less.