HANCOCK COUNTY — Homeowners in the county are bracing for higher tax bills after seeing a steep rise in their property assessments this year.
Climbing home sale prices are driving that trend.
Assessments on commercial properties, however, didn’t rise nearly as much as their residential counterparts.
Katie Molinder, Hancock County assessor, said home assessments rose 15% to 20%, with some as high as 30%.
Per a process required by the state, to determine 2022 assessments for taxes payable in 2023, Molinder researched all property sales in the county in 2021. Then she compared those sales to their respective homes’ assessed values to determine a ratio. From there, she calculated median ratios for neighborhoods of similar kinds of homes to determine an adjustment factor, which got applied to all the properties in their respective neighborhoods to come up with their new assessments.
Essentially, the higher sale prices are in a neighborhood, the higher assessments are going to be for all the homes there.
Last year’s assessments, based on sales from 2020, only went up between about 7% and 15%, Molinder recalled.
“We had a pretty steady market in early 2020,” she said of local real estate.
According to the Metropolitan Indianapolis Board of Realtors, the median sale price for a single-family residence in Hancock County was just over $200,000 in January 2020.
By March, that figure had bumped up to $210,000. Then, the COVID-19 pandemic shut much of the world down.
Home sales in the county started picking up again toward the end of the year, rising to a median high of $240,000 in September. But 2020 in its entirety remained relatively stable due to lower sales in the beginning of the year, Molinder noted. For December, the median was over $225,000.
Sale prices weren’t so steady in 2021, however, spiking to a median high of nearly $290,000 in August and finishing off the year at $283,000.
Molinder said she and her colleagues have been watching the trend with surprise.
“We are very sympathetic to these steep increases,” she said. “I did absolutely everything I could to keep what we could do to a minimum. I know it still seems so significant.”
She added her office has been inundated with calls as homeowners receive their assessment notices this spring.
“The easiest way to think about it is if you were to put a for-sale sign in your yard,” Molinder often encourages property owners.
If you’d list your home for the amount at which it’s assessed, the assessment is equitable, she continued. If you’d list it for lower, however, she encourages you to call the assessor’s office, which can be reached at 317-477-1101. That will provide an opportunity to go over sales of comparable homes in your neighborhood. It’s important to keep in mind price per square foot as opposed to overall sale price, Molinder said.
A call to the assessor’s office could also lead to a legitimate reason for a home’s assessed value to decrease.
“We do not profess to be perfect,” Molinder said. “I’m not married to these values.”
Homeowners can also do their own comparisons on the online mapping service the county uses at beacon.schneidercorp.com/?site=HancockCountyIN, where they can view property sales disclosures, past assessments and property report cards.
“Taxpayers can see everything I see when valuing their property,” Molinder said.
While the Indiana Department of Local Government Finance has reviewed and approved Molinder’s work on assessments in Hancock County for 2022, property owners can still appeal their assessments, which is also available via the online mapping service.
Hancock County has around 39,000 property parcels, Molinder said, adding it’s typical to have between 0.5% and 1% of total parcels appeal assessments.
“We should have a significant amount of appeals every year,” she said.
Last year, the county had 87. But a small amount isn’t the badge of honor it may seem to be.
“All it means is assessments are low,” Molinder said.
Her office is currently getting a lot of appeals over the 2022 assessments, but it’s nothing it can’t handle, she said. She added they all seem valid and more than half have already been settled.
Non-residential property assessments didn’t see nearly the same outcome.
“It just wasn’t there for commercial properties,” Molinder said. “Not in Hancock County.”
They increased less than 5%, she said.
Unlike in the housing market, there weren’t many comparable sales throughout the commercial sector to rely on, Molinder continued. The way the pandemic drastically changed and in many ways continues to impact how people interact with offices, sit-down restaurants and other public-facing properties likely diminished their investment appeal, she said.
Molinder added it may seem clear that a commercial property would be worth more every year.
“But I can’t do it without data,” she said. “I have to have information. Ethically, I have to have something to base that on.”
So she partnered with assessors in Marion County and the other counties surrounding it to commission market trend analyses for each of their respective counties.
Conducted by Indianapolis-based Integra Realty Resources, the Hancock County study reports that the market sale price per square foot for office space increased by about 2.5% between the fourth quarters of 2020 and 2021. Transaction volume was minimal during that time period, according to the report.
Market sale prices per square foot for retail space in the county rose just over 5% while industrial space went up 1.8%, the study states. Transactions in both sectors were intermittent throughout 2021, according to the analysis, leaving no clear trend in pricing.