Led by steep declines in Willoughby and parts of Ocean View, downtown and Larchmont, residential real estate assessments will fall by 4.9 percent in the fiscal year that begins July 1.
Real Estate Assessor Deborah Bunn released assessment figures to the City Council this afternoon.
Overall assessments, including commercial and industrial property, will decline 3.6 percent, Bunn told the Council. It will be the first decline in city assessments in more than two decades.
Virginia Beach Assessor Jerry Banagan, who said he expects a 5.75 percent decline in residential real estate, is the only other assessor in South Hampton Roads to announce an estimate.
The declines mean that most but not all Norfolk homeowners will see a modest reduction in real estate taxes beginning July 1. That assumes the Council does not raise real estate taxes.
Bunn stressed that not all of the recent declines in real estate prices are reflected in her figures. She said some neighborhoods were under assessed last year, and if housing prices have dropped in those neighborhoods, assessments may not have fallen.
In all, 193 of 268 neighborhoods will see reduced assessments and 53 will show gains. Of those with gains,12 neighborhoods will have increases of one percent or greater and 41 will have gains of less than one percent. Twenty two neighborhoods will see no change in their assessments.
Some 31 neighborhoods, including eight in the Ocean View and Willoughby areas, will have double-digit losses. The Shore Drive west waterfront (22 percent) and Shore Drive west (20 percent) neighborhoods in Ocean View will have the steepest decline. Willoughby will fall by 19 percent and the downtown College Place area by 18 percent.
Holly Point, a small neighborhood on the waterfront near the Lafayette Shores, will show an average increase of 34 percent, but nearly all of that increase was the result of new construction, Bunn said.
The city’s real estate tax base dropped in value from $19.1 billion to $18.4 billion. Residential real estate, including apartments, fell by $638 million to $14.1 billion, according to statistics released by Bunn.
Although there is little vacant land in Norfolk, values plummeted, with vacant residential land falling by 7.3 percent and vacant industrial and commercial land by nearly 6.5 percent.
MSNBC.comHOUSING SCENE
U.S. offers special homeowner benefits to military personnel
Servicemen and women have an extra year to qualify for tax credits for buyers. The government also helps owners who must sell their houses for less than what they owe.
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Under the Worker, Homeownership and Business Assistance Act, which was signed into law in November, military personnel and certain other federal employees serving outside the country have an extra year to qualify for the $8,000 tax credit offered to first-time buyers and the $6,500 credit available to repeat buyers.
Under the new law, eligible taxpayers must enter into a contract to buy a principal residence by April 30, and close the transaction no later than June 30. But servicemen and women get an extra 12 months, so they must sign a binding contract by April 30, 2011, and close no more than 90 days later.
The rule applies to individuals or their spouses who serve on qualified official extended-duty service outside the country for at least 90 days between Jan. 1, 2009, and April 30, 2010. According to the IRS, only one spouse needs to be overseas on official extended duty for the requisite time to qualify.
For most buyers, if the home is sold or otherwise ceases to be used as a principal residence within three years of the initial purchase, the credit must be repaid. But when the home belongs to an eligible member of the armed services, intelligence community or Foreign Service, that provision is waived if the house is sold in connection with orders sending the taxpayer to a new duty station at least 50 miles away. The new post can be either inside or outside the U.S., but the change must occur because the taxpayer is under orders to move for a period in excess of 90 days or indefinitely.
Members of the military also may be eligible for help if they are forced to sell their homes for less than what they owe on their mortgages because of a mandatory, permanent duty transfer.
This assistance was mandated under the American Recovery and Reinvestment Act, the law that raised the first-time buyers credit from $7,500 to $8,000 and waived the original repayment requirements.
There are numerous rules and eligibility requirements, but here’s a brief rundown of the expanded Homeowners Assistance Program, which is run by the Army Corps of Engineers on behalf of all the branches of the military.
Applications for aid will be processed according to eligibility in this order:
* Owners who were injured, wounded or became ill in the line of duty while deployed since Sept. 11, 2001, and are relocating for further medical treatment. Covered here are service members, including the Coast Guard, and civilian employees of the Defense Department.
* Spouses of the fallen who relocate within two years after the death of their mates.
* Owners affected by the 2005 round of base closings, without the need to prove that the closure caused local housing prices to decline.
* Members of the armed services who receive permanent duty station changes between Feb. 1, 2006, and Sept. 30, 2012.
Benefits are based on the prior fair-market value of the property, which is the purchase price as evidenced by the HUD-1 settlement sheet. But the amount may not exceed the 2009 conforming loan limits, which range from $729,500 in high-cost areas to $417,000 in other areas.
Sellers must make a reasonable effort to sell their homes for at least 30 days at current market value as determined by a Corps of Engineers automated valuation model. Then they must document how the price was gradually reduced until its “true current value” is reached.
When a home is sold for less than what it was purchased for, the program will “substantially offset” the loss up to 95% of the difference. The government will not make up past payments, nor will it pay outstanding judgments, personal encumbrances or junior liens. But it will pay all legally enforceable liabilities and for title services necessary to close the sale, as well as any other allowable closing costs.
For more information, contact the Corps of Engineers field office nearest you — in Sacramento; Savannah, Ga.; or Fort Worth — or go to www.usace.army.mil.
