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Residential properties in Mercer County are poised to surge an average of 35% in market value.
CELINA - Residential properties in Mercer County are poised to surge an average of 35% in market value, driven largely by a red-hot real estate market that shows no signs of slowing down despite higher interest rates.
Additionally, farmland values - determined by the state's Current Agricultural Use Value (CAUV) formula - are expected to skyrocket 100%, according to tentative results of a countywide real estate revaluation.
"In October, we'll send the final abstract to the state," said Sara Scott, the chief deputy of real estate in the county auditor's office, noting the Ohio Department of Taxation will then either approve the abstract or deny and suggest increases in taxing districts.
Asked about the fluctuations in residential values, Scott said there are increases as low as 12% and as high as 60%, depending on the location.
Though CAUV for different soil types is determined by a state formula, the average increase in residential properties in neighboring Auglaize and Van Wert counties tentatively are in line with Mercer County, Scott said.
As to how the new market values will impact property taxes, Scott emphasized there are not enough factors known at this time to tell.
"Taxes are not proportional to value. So even though your property will go up 35% in value, your taxes will not," she said. "We do not know what the tax rates will be until mid-December. That's when the state sends them to us. Of course, that's after the November election and all that other good stuff."
The topic of property taxes for 2024 is on the mind of officials in nearly every county, added county auditor Randy Grapner.
"Just because our values are going up does not mean the taxes will go up at the same rate," he said.
Most levies approved by voters collect a specific amount of money annually and when property valuations rise, homeowners may see a tax reduction factor.
"With all that value coming in on CAUV plus residential, it's going to change the reduction factors that are on the mills of levies," Scott said.
However, there is also inside millage, which is proportionate to increases in valuation.
In Ohio, property tax rates are computed in mills. Inside millage is provided by the state's constitution and levied without a vote by the people. Ohio's Constitution allows for 10 mills of inside millage to be shared by public schools, counties, townships and other local governments.
"They (the schools) just don't automatically get more money with it," Grapner pointed out. "That's not to say that there won't be an increase based on current voted millage. There will be the un-voted millage. The inside millage will move up with the value. … But it's not proportionate to the entire millage in your taxing district."
The revaluation is extensive update of property values and taxes that is required by the state every six years. Appraisers worked to assess the roughly 29,800 real estate parcels that make up Mercer County. The new valuations will be used to recalculate property taxes billable in 2024.
"We're in the appraisal business. That's what we do. Sara watches all these sales happen. She's putting in all of the new construction. Value, we don't care. It is what it is, and we follow the sales. We can support our values," Grapner said.
The revaluation takes into account new improvements, or in the event of a natural disaster such as a tornado, structures no longer on a property.
"Our appraisal company that we hire … they're looking at multilinear regression. They're looking at statistical analysis constantly. We are looking and they are looking at all the sales information that we collect over three years," Grapner explained.
Data mailers were sent out to residential property owners asking them to confirm or adjust information on property record cards.
"We have our people out in the field, looking at the houses, looking at the buildings, taking a look at everything to make sure that everything looks like the information we have. Sara is combing through aerial maps," Grapner said.
Real estate transactions are also weighed in determining new valuation.
"A lot of information goes into reappraisal. We take all of those figures and see what we have, correct anything and then we start looking at the sales," Scott said.
The county has over 160 neighborhoods or market areas of similar housing that Grapner's office looks to during the revaluation.
"We do mass appraisals, not independent appraisals, so we look at market areas," Scott noted. "We will adjust properties according to their market area, and it can be anywhere from 12 properties up to 200-and-some-plus properties that will all adjust about the same."
Once tax rates are finalized, collections will be allocated to various entities based on each governmental entities' inside and/or outside voted tax millage.
For example, of the total property tax revenue collected in tax year 2020, 66.8% went to schools; 21.5% to county departments such as senior citizens and children's services; 5.8% to townships; 3.7% to municipalities; 1.2% to fire levies; 0.9% to libraries; and 0.1% to other.
Grapner and Scott said the real estate market has had an outsized effect on the revaluation. A less intensive triennial update in 2020 showed residential market values climb by 17%, Scott noted.
"That was surprising to me, because I've been in here for 20 years, and I think the most that I've ever seen was around 8 to 9%. So 17 was a lot," she said.
She knew the revaluation would come in higher, but the 35% increase in residential values is "unprecedented," she said.
"But it's not just here, it's the entire country that's doing this," Scott said. "And there's no signs that it's slowing down."
Grapner said local real estate sales in the years 2020 to 2022 were the most active he can recall in all the years he's bought and appraised homes.
"But it's continuing in 2023," Scott quickly noted. "After we adjusted our values, we are still seeing homes sell higher than what our new values are at."
During the April to May timeframe in the 90s, there were typically about 175 real estate listings in the Celina and Franklin Township area. Today, that number has dwindled to about 20 listings - and of varying prices, from mobile homes to nice, newer big homes.
"If you could afford a $350,000 house, how many are out there? How many can you look at? Maybe one," Grapner said. "So, scarcity is what it's called. Supply and demand."
People are still borrowing money, though, to buy and build houses, Grapner said.
"We have people that are building houses," he said.
"That has not slowed down, even with the interest rates," Scott said.
"So, right now we are trying to reflect what the market's doing. I think that our market is going to continue to increase," Grapner said.
To view property information, visit www2.mercercountyohio.org/auditor/ParcelSearch/.
The auditor's office has set aside dates and times for phone and in-person informal property review appointments. In-person reviews will be held 9 a.m. to 3:30 p.m. today and Wednesday; noon to 6 p.m. Thursday; 9 a.m. to noon Friday; and 9 a.m. to 3:30 p.m. Monday.
Appointments are required. To schedule an appointment, call the auditor's office at 419-586-6402 or visit https://www.signupgenius.com/go/MercerCountyOhio.
