This remarkable piece appears in The Miami Herald: a surprising story about data publicly available on the website of the Miami Dade Property Appraiser. Apparently properties being bought out of foreclosure are not listed at the current sales price. "Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site."
It means more than that. It means that aggregate statistics for the performance of the housing market are being flagrantly skewed. It means that what is printed and reported in the mainstream media is inaccurate, too and that actual price declines--factoring in foreclosures--are deeper than economists are reporting, too.
"Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said." Not qualified, and, we are not in the steepest recession since the 1930's. It was called a Depression, then.
But we have other reasons to disguise the nature of our economic emergency. Perhaps they are along the lines of the PR missive that landed in my email recently: ""... since mid-March 2009, recession buzz has dropped 47 percent in the U.S., UK, Germany, Italy, Spain, Australia and New Zealand. James Russo, Vice President, Global Consumer Insights for The Nielsen Company says: “While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession -- often dramatically less. ... There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior. From the end of 2008 to March 2009, when recession discussions were highest, we found that sales actually declined by 2.3 percent. From mid-March to early June, as recession chats dropped, we found that sales actually showed a modest increase."
It helps the cause of disinformation on the economy, if foreclosures are under-reported. Too, it would be interesting to know what kind of consultations occurred and who is responsible--if not the Property Appraiser in Florida's most populous county--for this egregious mistake if the facts are being suppressed.
Posted on Sun, Jul. 19, 2009
Foreclosure data comes up short on Dade website
By JACKIE BUENO SOUSA
jsousa@MiamiHerald.com
M iami-Dade County's online property information has a cult-like following in some circles. There are the professionals who rely on the information for business matters, and home buyers who use it to help measure property values. And then there are the just plain curious, who'll enter the site to snoop at how much their neighbor's house cost or to compare tax bills.
In fact, since January the website has had almost three-quarters of a million visitors, who visited a total of about two million times. Among them was Grisel Lopez. Today, however, she no longer gives the information the credibility she once did.
The reason? She recently learned that if a property was bought out of foreclosure the sales date and price won't be reflected. Instead, the site shows the date and price of the previous sale. With foreclosures accounting for a large percentage of sales today, that means that potentially thousands of properties have or will have misleading information on the site.
OUT OF DATE
Last September, Lopez purchased a home out of foreclosure for just over $292,000. The house had previously sold during the real estate frenzy for $495,000. Curious, she went online a few weeks ago to look up the county's information about her new house.
''It had my name,'' she says, ``but it had the old sales date and price.''
Assuming it was a simple data-entry mistake, she called the county Property Appraiser's Office. It wasn't an error, she was told. Because the sale was a foreclosure, and the Property Appraiser's Office isn't recognizing foreclosure sales, the new sales price wasn't listed and the old, previous price and date remained -- with her name attached to it.
'I told them, `That's misleading information; you're falsifying records,' '' recalled Lopez, exasperated. Certainly, she thought, someone higher in the command chain would correct the problem. So she made more calls, to no avail.
Then her father visited the site, www.miamidade.gov, to look at information on other properties he knew had been purchased out of foreclosure. Sure enough, she says, the new owners were listed but the old sales prices remained.
That the Property Appraiser's Office is knowingly putting out misleading property information is disturbing on many levels, particularly when many of the site's users deem its content to be official and reliable. It is one more consequence of the office's decision to ignore foreclosure sales when assessing values, a move that is helping to prop up property taxes.
`NOT QUALIFIED'
Patrick Smikle, a spokesman for the Property Appraiser's Office, confirms that sales dates and prices of foreclosed properties are not being updated online. ''We do not list sales information for sales we consider as not qualified,'' he said.
Understood. But, I emphasized, the information being given to the public is not correct. Lopez, for example, did not buy her house on the date nor for the price the county shows online. Why not simply list the sales date and price as ''unqualified'' or, perhaps leave it blank?
Smikle wasn't sure of the answer. But he said the office is planning to revamp the site so that more information about a property's sales history can be included. Among the changes, he said, would be to include the prices of foreclosed homes and have a way to indicate that those are unqualified sales.
When will that happen? There's no telling, he says; no deadline or time frame has been established.
http://www.miamiherald.com
22 comments:
This is outrageous. I looked up two of my September foreclosures that I reported on -- indeed that column is true. I crosscheck the property appraiser records with the clerk's records: They indeed have the new owners named but the old prices and old sale dates as if the foreclosures never happened.
What is going on? This is skewing property tax rolls higher...are the people having their taxes computed from the bogus number?
Nestor at Property Appraiser....
Florida Dept. of Revenue will not let them use foreclosures because they are a distressed sale.
They compute within 1 square mile sales and that is what the property taxes are based on.
I bought a foreclosed home in Sept 2008. I swear the price had been updated on miamidade.gov, but now I'm only seeing the previous sale price.
Whatever as long as they get my 2009 taxes right!!
I think that they do it different in Broward.
I called Lori Parrish's office and spoke to Kim Cardone, her assistant. She said foreclosures that are distressed have a "D" next to the amount and date of the distressed sale. But unlike Dade, they DO list the sale price and date. Also, they do not include all foreclosures as distressed sales. If a bank lists a property and advertises it, they do not consider it a distressed sale.
So it is apples and oranges in comparing Miami and Broward foreclosure information and looking up records. Sounds like Broward at least is more accurate with real numbers.
I must say I'm baffled by the distinction of an "unqualified" sale. Buying "out of foreclosure" means only that the place was bought from the mortgage holder, presumably a bank but not necessarily, but from the current owner nonetheless. No one forced the mortgage holder to sell at this new, reduced price except for whatever fiscal pressure the mortgage holder might be under for having lent too much to begin with. Whatever the price at which it changes hands, that's the new market price, even if it means that George Burgess has less money to squander.
Say I put my suburban dream house on the market for X dollars, find a buyer who agrees to my price and we schedule a closing. On the morning of the closing the soon-to-be new owner drops by and notices that the pool out back is now filled with 25,000 gallons of festering elephant dung. The properly recorded price should be whatever I'm forced to accept given the new circumstance, not what the house might have fetched back in the day with the pool was filled with crystal clear glacier water from the Swiss Alps.
Also, I see the state is in on the scheme by disallowing so-called "distressed" sales. Lessee here, the lovely wife catches the philandering hubby messing with the maid, throws him out and files for divorce, including a demand that the house be sold and the proceeds split. Under the circumstances, the house sells at a discount. Is this not a "distressed" sale and would the sales price count? Once the guvmint puts itself in the business of deciding what the price should be, you might as well dispense with the myth of market value and just make up whatever number you need to keep the guvmint afloat. Damn slippery slope if you ask me. (Not that anyone would, mind you.)
You can bet your bippy that copies of this article are even now going into lawyer's files that will show up at the next round of assessment protests at the Value Adjustment Board.
You can bet your bippy that copies of this article are even now going into lawyer's files that will show up at the next round of assessment protests at the Value Adjustment Board.
In anser to: “...While discussions about the recovery are still quite low, we have seen that the public is talking less about the recession -- often dramatically less. ... There appears to be a strong correlation between what consumers are saying in discussion groups and their subsequent actual purchase behavior."
Well, hell, why don't we just keep doing that in the stock market too and maybe things will get better.
Miami-Dade property appraisers office doesn't even car if you don't pay your taxes. They give you two years.
I was researching a property yesterday and noticed that other sales had taken place but the property appraiser wasn't showing anything. Miami is a fraud.
File this in the much ado over nothing.
In the reporting of this Gisel Lopez case, there is no distinction as to whether the new foreclosed price was assigned to Gisel, or if that price was left blank. My guess is that, like all non-arms length transactions, it was left blank on the line associated with Gisel.
The next line down on the appraisers page would be a line with the previous buyer and that previous buyers $495,000 price.
At least this is the Standard Operating Procedure for the last decade.
If your parent gave you a house worth $500,000 and charged you five hundred dollars, it is a non-arm's length transaction, and your name as new owner will appear with a blank purchase price to the right. This is how quit claim deeds in instances of divorce are handled.
At ease soldiers...
PS. No Genius, the new owners are not having their tax assessed values assessed by any purchase price. The tax assessor will assess the property's tax assessed value on (guess what!) the value of the home. In the case of non-arms length transactions, the property is valued relative to others in the immediate area with similar features and functionality.
Dear Anonymous:
Amidst the certainty that government is manipulating data and information in relation to trillions of dollars of taxpayer obligations-- see the Inspector General report for the US Dept. of Treasury-- "the soldiers" have every reason to draw attention to the issue of how foreclosures are being accounted.
For instance, I am still not clear-- not withstanding your explanation-- exactly what sales numbers are used by data aggregators (Realtytrac, for instance), or, how they incorporate foreclosures.
Just because a foreclosure is treated as a non-arms length transaction, doesn't mean the effect of the foreclosure is neutral to the surrounding property value. I understand perfectly well why a property appraiser and local budget chieftains are desperate to assess property at pre-crash levels: it still will not stop property owners from challenging in court for lower assessments in the coming years.
We are in the mid-innings of this economic downturn, in other words. I hope the experts reading this blog can explain to me what I'm missing.
Maybe I am looking at this from a simplistic level,but if I were in the market to buy a home in the deep south dade area where every home within 3 miles is newish and most have been foreclosed and are now selling at reduced rates that more accurately reflect their value.All of those new prices will be deemed unqualified and the one or two homes that have not yet undergone foreclosure but show the original sales price will dictate what my taxes will be? And if the tax assessor says so, won't the home appraiser be forced to concur, thereby causing an inflated worth for my mortgage?
Isn't this what got us into this mess to begin with?
www.miamiherald.com/opinion/letters/story/1150266.html
Appraiser's missteps
Jackie Bueno Sousa makes an important point in her column on the property appraiser's office not showing accurate purchase prices for homes bought following foreclosures (Foreclosure data comes up short on Dade website, July 20).
Government is supposed to work for us; however, we now have another example of our upside-down world in which we are working for government. True figures could result in lower assessments that result in lower taxes. But the government needs more money than true values will engender, and so it withholds the true values.
This would be illegal in the private sector. The prices paid on these foreclosure-related purchases are the best evidence we have of fair-market value. The county would prefer to value these properties in a way that does not reflect fair-market value in the hope of getting more taxes than a fair value would allow.
The county should be required to do what the rest of us have to do: If receipts in this economic downturn are insufficient and there are no reserves to rely on, then cut where needed to get back in balance. Don't cheat us by falsely valuing or obscuring the real values of properties.
TERRANCE J. MULLIN, Coral Gables
This should alarm the county commissioners. (Of course, they've never expressed alarm before about reality...) The question they should be asking of George Burgess, county manager and financial wizard, is what happens to revenue if county-wide assessments are reduced to reflect the cascading effect of foreclosures. This is exactly what Excel is designed to do! What happens to the cost of financing billions and billions in debt, under different scenarios of budget deficits? Is anyone at County Hall listening, or, is everyone's ears pinned back with duct tape?
I bought my home in 1980 for 125,000. It has been on the rolls ever since as that sale date and price.
A few months ago, it was changed to a sale date of 1976 and 11,000 but with my name. The property has never had a foreclosure and no mortgage for 10 years. WTF? At the least, the information on the county site is inaccurate. Who knows what the impact will be on overall assessments. More importantly, why is the county stuffing the rolls with bad information?
The property appraisers web site was never intended to be an "official source" for sales information. The Florida Department of Revenue does not permit the use of distressed sales in the computation of assessed values. Take that up with the state legislature. That said, other counties do list the sales with a notation that it is a qualified or unqualified sale (for purposes of computing AV).
"The Florida Department of Revenue does not permit the use of distressed sales in the computation of assessed values"
I called the county appraiser on the same issue. Bought foreclosure for 110K but price still listed at $430K. Was told the same thing. The guy even admitted that the majotity of sales are distress sales. So the majority of sales are not counted to determine market value. Someone should sue those bastards.
What at joke!
Since "distressed" properties would lead to lower taxes, they are blatantly ignored, even if they account for most sales these days.
When the real estate bubble was taking place NO ONE in our county took the time to see whether there was any fraud involved regarding the inflated prices we saw.
They immediately raised taxes, not only that of those properties that recently sold, but also that of any other home without a homestead exemption. Suddenly owners of second homes, vacation homes and businesses saw their taxes double within 3 years.
Banks gave loans to people without asking for any proof of income, therefore making it possible for someone making minimum wage to qualify for a 300k home.
I am appalled with the level of corruption we are dealing with here. Anyone with a bit of common sense could see that most of those properties bought at the peak of the boom were meant to be flipped and were never lived in by those who bought them. Speculation brought us to this point, and now our county government is looking at ways to continue bleeding the middle class dry by advocating for property tax hikes and blatant lies.
If the only sales you see nowdays are foreclosures/short sales, that means the market is correcting itself, and our county needs to adjust those changes. No more lavish projects, no more waist. Period. If prices are back to 2004 levels, their budget should do the same...
I've got a question for you all. Did anybody here check to see if MLS "SOLD" prices for these foreclosures in Miami Dade were reported at the foreclosed upon "SOLD" price or the last "SOLD" price before the foreclosure?
The reason I ask is the obvious: should the MLS be massaging the foreclosure sales (or not even reporting them) then median and average prices reported to Case/Shiller's Miami's Index is way above what it really is.
This smells very fishy to me. Before you say "case closed" I think you'd do Miami Dade watchers a real service to see if the local MLS is reporting accurate sales data too.
Your friend in Key West,
Rock Trueblood
Hey guys
The journalist for the Herald didnt include that the real name on public records didnt match the actual owners.The price on public records is much, much lower than the real sold price Is there any way tu sue this county for lying people on piblic records???
If overall values go down, guess what, the millage rate will go up. The county has bills to pay.
The point of the matter is that a record is a record and it should be accurate. I don't look to the MLS. I look to the county for the real number.
Furthermore, if 80% of the homes were handled as short sales, at what point do the foreclosures start to become relavent to appraiser's numbers.
The bottom line is that the numbers are the numbers. The PT office needs to go back a few years and start correcting the numbers. We can analyze where we go from there when we know WTF we are in all this mess. If we don't fix those numbers now, we will lose all integrity in the data base.
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