Prior to beginning my research for the hearings, I knew the general trend of prices between January of  2008 and  January of 2009 was clearly in the downward direction. Anyone and everyone related to the residential real estate industry, from practioners to teachers, researchers, news media and the general public had been talking about it, and living it since mid-2006 when the trend began. Headlines in newspapers throughout Tucson and the Country were declaring this loss of property value, in all segments of the real estate market, in what seemed like a weekly barrage of bad news.  What I needed to determine was the extent of the trend. Was it different in different parts of Tucson. Did it effect all Subdivisions and land types in similar ways? Were there niche markets that were holding in value? Were foreclosed sales, which were starting to take place during this period, the exception or the norm? Did they establish market value for lots and land? In looking at sales velocity and price over a period of years, what did that tell us about each area of town and niche market value? As you can imagine this took a lot of preparation time and thought to come up with a realistic recommendation for current land values. In addition to my research, the taxpayer representative, Sage Tax Group, did extensive additional research of the land markets not only in Pima County but throughout the State of Arizona to see how Pima County property values compared. We were very prepared and armed with facts as the hearings begun.

The big question in my mind was would the Assessor be as willing to lower values during a recession as he was to raise values during the strong years of 2003-2006? The answer was quickly apparent. The first hearing was staffed by a single member who had recently retired after working for the Pima County Assesssor’s office for about 30 years. He politely listened to the Assessor’s staff recommendations, Sage Tax Group’s and my recommendations, which in all cases represented significantly lower and what I felt were more realistic values, and made the judgement to go with the Assessor’s numbers in EVERY case. The testimony presented to him was pretty much like this: we documented 2008 price drops, reduced # of sales, specifically addressed identical comps with low values,  showed multiple examples of similar property with severly reduced sales prices , and proved the lack  of buyer and investor interest in land and lots in the each sub- marketplace that we were discussing.  The Assessor’s staff  member would usually find an example or 2 where a purchaser had overpaid  for a similar lot (there are always aberrant cases in any market) and use that to extrapolate current trends and values. The third hearing I attended which was staffed by two hearing board members, one of whom was the  retired, past Pima County Assessor, went in exactly the same way. In the second hearing, staffed by two currently working, independant, MAI Appraisers and a 25 year retired Assessor employee, the process was as it was meant to be. The three hearing officers discussed the information before them, used some common sense,and came to a consensus. Interestingly enough, in every instance, the appraisers disagreed initially with the retired Assessor’s  employee who recommended accepting the exact Assessor’s value each time. Although influenced by it’s third member, this board settled on a value somewhere in between Sage’s and the Assessor’s recommendation. I still felt they were a bit on the high side given current conditions, but left believing that the individual property owners that we represented on that given day had been given a fair determination and outcome. Not a belief  I held at the end of the other two hearings.

to be continued.

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