McHenry County Blog

The following popped into my mailbox yesterday. Since the legislation would allow county boards to impose fees on the sale of homes, I thought folks might be interested in it this memo from the Illinois Association of Realtors:

Illinois Home Buyers to Get Whacked With More Little Fees — This Time for an “Affordable Housing Trust”

On Wednesday the Illinois Senate Local Government Committee approved legislation OPPOSED by the Illinois Association of Realtors.

Senate Bill 3001, sponsored by Senator Susan Garrett would permit all counties the authority to establish an affordable housing trust fund by imposing ANOTHER surcharge on the recordation of any real estate related documents.

Fees would be imposed by ordinance of the county board WITHOUT VOTER APPROVAL for the purpose of providing financial support for affordable housing activities for low and moderate income households “as determined by the county board.”

Pam Althoff

The bill grants a county board the authority to impose a charge that begins at $5 in 2010 and 2011 which can be increased up to $10 after 2019.

Voting AGAINST the REALTOR position: Senators Maggie Crotty, Gary Forby, Linda Holmes, Toi Hutchinson, Terry Link and Pam Althoff (emphasis added because of her representation of this area)

Voting WITH the REALTOR position: Senators (Larry) Bomke and (Brad) Burzynski

Sounds like another government boondoggle to me…  Take from the poor homebuyer (or perhaps it will be levied on the seller) and give to Government Bureaucrats with pennies going to some sort of trust that supposedly helps homes be more affordable for someone (who probably shouldn’t be buying in the first place – because they can’t afford it)

Rick Hauser

The only local legislator mentioned is State Senator Pam Althoff.

In the furiously fought 26th state senate race to replace Bill Peterson, Republican Dan Duffy has reported receiving an additional $8,117.

Considering the bad publicity in both the Daily Herald and the Northwest Herald that his opponent Round Lake Mayor Bill Gentes has gotten for not telling the truth about having been let go by the Realtor Association of NorthWest Chicagoland, seeing $5,000 from the Illinois Association of Realtors go to his opponent must have galled Gentes.

Gentes did write a letter of apology.

In addition, Chris Reyes of Rosemont donated $2,500 and the Health Care Council of Illinois Politic paid Joe Cook of Wauconda $717 for consulting services and mileage.

The story with Bill Gentes’ big eyes comes from Round Lake Area School Board member Guy Finley’s blog, Stay the Course. Finley had a different “big eyes”-illustrated story yesterday.

In the furiously fought 26th state senate race to replace Bill Peterson, Republican Dan Duffy has reported receiving an additional $8,117.

Considering the bad publicity in both the Daily Herald and the Northwest Herald that his opponent Round Lake Mayor Bill Gentes has gotten for not telling the truth about having been let go by the Realtor Association of NorthWest Chicagoland, seeing $5,000 from the Illinois Association of Realtors go to his opponent must have galled Gentes.

Gentes did write a letter of apology.

In addition, Chris Reyes of Rosemont donated $2,500 and the Health Care Council of Illinois Politic paid Joe Cook of Wauconda $717 for consulting services and mileage.

The story with Bill Gentes’ big eyes comes from Round Lake Area School Board member Guy Finley’s blog, Stay the Course. Finley had a different “big eyes”-illustrated story yesterday.

What are the odds that 26th District Democratic Party state senate candidate Bill Gentes will get the Daily Herald’s endorsement after this?

An article by Bob Susnjara is headlined,

State senate candidate apologizes for ‘outright lie’

That does not sound auspicious.

The article reports that Gentes told the Daily Herald’s editorial board that he was “on a leave of absence from his full-time job as operations director at the Realtor Association of NorthWest Chicagoland.”

Checking that out, the reporter discovered the statement was not truthful.

According to CEO Peggy Kayser,

“On advice of counsel, I cannot give the terms of his separation, but Bill stating he is on a leave of absence is an outright lie.”

Oy vey!

In a subsequent interview with the Daily Herald, Gentes admitted he was fired in February and was embarrassed to be jobless and apologized for not telling the truth.

Partially as a result of the regional Realtors’ organization endorsement, Duffy got a $5,000 check from the state organization, the Illinois Association of Realtors.

What are the odds that 26th District Democratic Party state senate candidate Bill Gentes will get the Daily Herald’s endorsement after this?

An article by Bob Susnjara is headlined,

State senate candidate apologizes for ‘outright lie’

That does not sound auspicious.

The article reports that Gentes told the Daily Herald’s editorial board that he was “on a leave of absence from his full-time job as operations director at the Realtor Association of NorthWest Chicagoland.”

Checking that out, the reporter discovered the statement was not truthful.

According to CEO Peggy Kayser,

“On advice of counsel, I cannot give the terms of his separation, but Bill stating he is on a leave of absence is an outright lie.”

Oy vey!

In a subsequent interview with the Daily Herald, Gentes admitted he was fired in February and was embarrassed to be jobless and apologized for not telling the truth.

Partially as a result of the regional Realtors’ organization endorsement, Duffy got a $5,000 check from the state organization, the Illinois Association of Realtors.

The Chicago Tribune ran an article about real estate prices the Tuesday before last.

When I finally took a look at it, what has happened in McHenry County jumped off the page.

In the last year, home prices here have dropped by a higher percentage than in any other Chicago-area county.

Down 17%, according to the National Association of Realtors and its state affiliate the Illinois Association of Realtors.

The median price (meaning half of those sold are above the price and half below), is under $200,000– $199,177.

That’s the lowest average price in Chicagoland.

Not only did McHenry County home prices plunge farther than anywhere else, but home prices in McHenry County are cheaper than anywhere else. Next cheapest is Will County at $212,000 and Kane at $222,500.

Home prices fell least in Kendall, Cook and DuPage Counties—all under 5%. Lake prices held up pretty well, too, down just 6.6%.

Kendall County sales were down almost 40%, but it is a small county with only 113 sales.

McHenry County dropped 27.1% in home sales.

Lake was worse at 30% fewer home sales that in July of 2007.

Will and Kane were both down 25%, with Cook just behind at 24% and DuPage at 23%.

If you want to know what will this mean to your real estate taxes next year, you might want to read this article.

The Chicago Tribune ran an article about real estate prices the Tuesday before last.

When I finally took a look at it, what has happened in McHenry County jumped off the page.

In the last year, home prices here have dropped by a higher percentage than in any other Chicago-area county.

Down 17%, according to the National Association of Realtors and its state affiliate the Illinois Association of Realtors.

The median price (meaning half of those sold are above the price and half below), is under $200,000– $199,177.

That’s the lowest average price in Chicagoland.

Not only did McHenry County home prices plunge farther than anywhere else, but home prices in McHenry County are cheaper than anywhere else. Next cheapest is Will County at $212,000 and Kane at $222,500.

Home prices fell least in Kendall, Cook and DuPage Counties—all under 5%. Lake prices held up pretty well, too, down just 6.6%.

Kendall County sales were down almost 40%, but it is a small county with only 113 sales.

McHenry County dropped 27.1% in home sales.

Lake was worse at 30% fewer home sales that in July of 2007.

Will and Kane were both down 25%, with Cook just behind at 24% and DuPage at 23%.

If you want to know what will this mean to your real estate taxes next year, you might want to read this article.

Yet.

Because of a compromise I made in the 1970′s in Springfield, real estate assessments are not based on current market value.

Or even last year’s market value.

Representatives from the Illinois Agriculture Association in the first floor committee meeting room next to the main stairway argued that using just one year would be unfair to farmers who sold their land to a developer. A recreational development in Jo Daviess County was the example, I think.

The Farm Bureau lobbyist suggested using a three-year average.

Against my better judgment, I agreed.

The result is the three-year average to determine the value of properties…except farms

The farm lobby got exempted from the market value standard, getting legislation enacted that valued agriculture property according to productivity.

That means, of course, that farm land is assessed much, much lower than homes and businesses. It’s the reason that developers grow corn on their empty land.

Lower, much lower taxes than if based on what the developer paid for the land.

But, back to the topic at hand.

The Illinois Association of Realtors, now headed by Crystal Lake Realtor Kay Wirth, who is with Re/Max Unlimited Northwest, compiles home sales data.

The latest month’s information shows the median price dropped 4.3% in McHenry County compared to a year ago.

Strangely, Kane County prices went up 1.1%; Lake County’s increased 3.4%.

Because of the three-year average definition used in assessing property, that does not mean your assessment will be cut an average of 4.3%.

The average March McHenry County home’s prices for the last three years follow:

2008 – $242,392
2007- $250,180
2006 – $258,437
2005 – $243,595
2004 – $230,294

By next year’s tax bills (not next month’s, but next year’s) you might think that assessments should fall.

Averaging out 2004, 2005 and 2006 prices shows an average price of $244,000.

For 2005, 2006 and 2007 the average is $250,000

The average is also $250,000 for 2006, 2007 and 2008.

So, the average for next year’s bills seems to be higher than the average for last year’s tax bill, but the same as for this year’s bill.

I wouldn’t be expecting a cut in assessed value next year.

BUT, even if the average were lower, that would not mean your tax bill would decrease anymore than increasing assessments mean it will rise.

I know that is counterintuitive, but the property tax cap, which has been in effect since the early 1990′s, has resulted in tax districts being forced to lower their tax rates.

The tax cap legislation limits the growth of a tax district’s revenues to the increase in the cost of living (CPI), plus taxes on new construction.

With assessments increasing more than the Consumer Price Index for a long, long time, that meant tax rates had to decrease.

The result is that probably every tax district with a tax rate limit now is below that limit.

So, with a lower assessment tax base, the districts will just raise their tax rates enough to be able to capture whatever the increase the CPI shows.

Added to that will be whatever tax increment financing (TIF) districts pull out of the tax base. Same reasoning as to what will happen to the tax rates.

= = = = =
The map is from the April 23, 2008, Chicago Tribune.

Yet.

Because of a compromise I made in the 1970′s in Springfield, real estate assessments are not based on current market value.

Or even last year’s market value.

Representatives from the Illinois Agriculture Association in the first floor committee meeting room next to the main stairway argued that using just one year would be unfair to farmers who sold their land to a developer. A recreational development in Jo Daviess County was the example, I think.

The Farm Bureau lobbyist suggested using a three-year average.

Against my better judgment, I agreed.

The result is the three-year average to determine the value of properties…except farms

The farm lobby got exempted from the market value standard, getting legislation enacted that valued agriculture property according to productivity.

That means, of course, that farm land is assessed much, much lower than homes and businesses. It’s the reason that developers grow corn on their empty land.

Lower, much lower taxes than if based on what the developer paid for the land.

But, back to the topic at hand.

The Illinois Association of Realtors, now headed by Crystal Lake Realtor Kay Wirth, who is with Re/Max Unlimited Northwest, compiles home sales data.

The latest month’s information shows the median price dropped 4.3% in McHenry County compared to a year ago.

Strangely, Kane County prices went up 1.1%; Lake County’s increased 3.4%.

Because of the three-year average definition used in assessing property, that does not mean your assessment will be cut an average of 4.3%.

The average March McHenry County home’s prices for the last three years follow:

2008 – $242,392
2007- $250,180
2006 – $258,437
2005 – $243,595
2004 – $230,294

By next year’s tax bills (not next month’s, but next year’s) you might think that assessments should fall.

Averaging out 2004, 2005 and 2006 prices shows an average price of $244,000.

For 2005, 2006 and 2007 the average is $250,000

The average is also $250,000 for 2006, 2007 and 2008.

So, the average for next year’s bills seems to be higher than the average for last year’s tax bill, but the same as for this year’s bill.

I wouldn’t be expecting a cut in assessed value next year.

BUT, even if the average were lower, that would not mean your tax bill would decrease anymore than increasing assessments mean it will rise.

I know that is counterintuitive, but the property tax cap, which has been in effect since the early 1990′s, has resulted in tax districts being forced to lower their tax rates.

The tax cap legislation limits the growth of a tax district’s revenues to the increase in the cost of living (CPI), plus taxes on new construction.

With assessments increasing more than the Consumer Price Index for a long, long time, that meant tax rates had to decrease.

The result is that probably every tax district with a tax rate limit now is below that limit.

So, with a lower assessment tax base, the districts will just raise their tax rates enough to be able to capture whatever the increase the CPI shows.

Added to that will be whatever tax increment financing (TIF) districts pull out of the tax base. Same reasoning as to what will happen to the tax rates.

= = = = =
The map is from the April 23, 2008, Chicago Tribune.