Property tax reassessment can be hard to figure

Oct. 20—Data collectors are hitting neighborhoods looking at homes for Mercer County's first property reassessment in over 50 years.

"We started a couple of weeks ago in West Middlesex and Shenango Township," Rita Yannayon, Tyler Technologies' project manager, said. Mercer County commissioners awarded the $3.804 million contract to the Moraine, Ohio, company in May.

It's the first reassessment the county has undergone since 1971. Commercial and industrial properties also will be reassessed.

For homeowners it comes down to this: What is my home valued at now versus the value in 1971?

Local Realtors are regularly tasked with setting a sticker price on a home. But they're saying home values now are a bit wacky to figure.

One one hand there's a shortage of houses for sale, which has bumped up prices. On the other hand, mortgage rates have soared from a couple of years ago, which has somewhat curbed demand.

"It's very hard right now to price a home," said Debbie Shelby, a Realtor at Howard Hanna's Hermitage office. "They're all over the place. We've hit higher priced homes and higher interest rates at the same time."

Mortgage rates averaging about 3 percent in 2021 are now running around 8 percent, according to The Mortgage Reports, an online site that tracks national rates.

In using those numbers, monthly payments for a 30-year, $300,000 mortgage are now $936 higher than two years ago.

There are cases where existing hefty property taxes on a home are hurting values. One Sharon home recently hitting the market has $8,800 in annual taxes.

"When you add insurance costs and spread it out over a year, the monthly payments are higher than what most peoples' mortgage payments are," said Nancy Jones Schlegel, a Realtor and branch manager at Berkshire Hathaway HomeServices' Hermitage office. "It's really hard to sell a home with those kinds of taxes."

Here's where the figures really get banged around.

In September 2022 the average price for a house sold in Mercer County was $128,000, according to Berkshire Hathaway. In January the average was $102,000 and the average so far this month is $140,000.

Factors for these wide swings include everything from the season a house was sold to the particular stock of housing available at a given time.

The million-dollar question

Understandably, homeowners immediately want to know the reassessed figure for their abode.

But that's not going to happen.

There are 60,500 parcels in Mercer County needing reassessment. Visiting all of those sites will take time.

All property owners will receive value notices after July 1, 2026. They can file an appeal with the county if they disagree with that number.

On Thursday, Mercer County Commissioners approved a $230,000 refund for Grove City Premium Outlets after the Springfield Township shopping center won its assessment appeal.

Commissioners Chairman Matt McConnell said that refund for 2022 and 2023 hurts.

"Any type of refund, any type of settlement of our assessment appeals, that's money coming off of the county revenue. It's coming off the school district and coming out of the municipalities," McConnell said.

He said he believes the county must do what is fair.

"They justified that value, and that's what we were able to accept," McConnell said. "The school district and municipality both have a right to object to the assessments, and sometimes they do."

Commissioner Tim McGonigle said commissioners knew this refund was coming, and the county budgeted for it. The money comes out of the county's general fund.

The appeals process stands to get a workout after value notices go out, the ability to appeal has always been part of the assessment process. In recent years, the Shenango Valley Mall, Hermitage Walmart and the NLMK steel mill in Farrell have all won lower assessments in appeal.

"The reassessment resets everything," McGonigle said, referencing the tax year that new assessment values will go into effect. "We will reboot in 2027.

A long view

By law a reassessment has to be revenue-neutral. That means the county, and the municipalities and school districts that collect property taxes can't collect more — as measured in dollars — in property taxes than they did before the reassessment.

But that's an overall calculation. Individual property owners could end up paying more. Tyler representatives previously told county officials that they expect tax bills to increase for about 30% of Mercer County property owners.

Final reassessment numbers for all of the county aren't expected until November 2026. New figures will be applied to 2027 taxes.

There's a purpose in having a timeline of nearly three years before the release of final values. The large time window lets assessors more-accurate valuations of properties, Yannayon said.

A big factor in determining a home's value is recent sales prices of nearby similar homes, she noted.

"We're going to take a 30-month snapshot of all those sales," Yannayon said. "That gives us better information."

But that's not as cut-and-dried as it sounds.

Three exact homes built in 1960 sitting together on the same street can have far different reassessments, she said. If one home added an addition in 1975, and another home added two additions and finished their basement in 1995, and nothing was done to the third home over that period it will mean different values for those homes.

"We want to create a fair tax system," Yannayon said.

Herald Staff Writer Melissa Klaric contributed to the story