"The market is bad now," said Marshall Isenberg, who appraises properties for foreclosure sales in the county.
"Banks are willing to take a loss."
Real estate agent Ray Doster said mortgage lenders, who typically buy the properties in foreclosure sales, often are willing to sell at steep discounts. "There are some tremendous buys," he said.
But they rarely are willing to accept half of the asking price, he said. "They're not getting them that cheap."
Real estate experts say that another factor frequently affecting price is poor condition of foreclosed properties.
Whatever the cause, the small selling prices have important implications for the Toledo area - especially if they turn out to be indicative of slippage in housing values overall.
Values are used to calculate property taxes. If overall values are lower, that means lower tax collections and less money for schools and other agencies that depend on the income stream.
Auditor Anita Lopez, the county official responsible for setting values, said it is too soon to say how much values have changed in the housing slump.
Under Ohio law, she will update values of the county's 200,000 parcels next year based on recent sales prices. The update will follow by three years a comprehensive 2006 re-evaluation that included visits to properties.
Unlike that evaluation, however, the so-called "triennial review" raises or lowers values based on average selling prices in the neighborhood but doesn't look at properties individually, said John Kohlstrand, a spokesman for the Ohio Department of Taxation.
Excluded from calculations are sales records for houses sold to family members and most involved in foreclosures, he added.
The state, which compiles separate sales records for each county, excludes any sale involving a bank or mortgage lender because such transactions usually take place under fire-sale conditions, officials said.
The Taxation Department has advised county officials that, under accepted guidelines, they may count sales involving homes sold by banks after foreclosures, but only if the transaction appears to reflect the home's fair value.
In Wood County, where properties were up for review this year, no adjustment was made in values based on a recommendation from the Taxation Department, Auditor Michael Sibbersen said.
Home prices overall are down across the Toledo area, according to reports from the Toledo Board of Realtors. But losses aren't as large as those suggested by sales of properties involved in foreclosures.
Average prices in June fell to $120,000 in Lucas County and $126,000 across northwest Ohio from $126,000 and $134,000, respectively, in June, 2007, according to the Toledo Board of Realtors.
Mr. Isenberg defended the seven appraisers who work for the sheriff's department. Homes involved in foreclosure actions don't always attract what they're worth, he said.
"It's a forced sale a liquidation. That's a factor."
Appraisers do not consider the amount owed on the mortgage, he said.
But Mr. Doster, an agent at Toledo's ReMax Preferred Associates who specializes in foreclosures, said appraisals are often too high.
Reasons, according to real estate experts, include the inability of sheriff's appraisers to get inside homes controlled by uncooperative home- owners. Another factor is unseen problems like stripped plumbing.
For this story, The Blade selected the July 11, 2007, date at random.
Examined were sales in which the house since has been resold. Foreclosure experts say such sales are a more accurate reflection of market prices than foreclosure auctions, where houses typically go to the lender for the mortgage balance.
Five dozen properties were scheduled for sale at the auction last year, but 27 either were withdrawn from the auction beforehand or drew no bidders.
Of the 34 properties that sold, a dozen still remain in the hands of mortgage lenders.
The remaining 22 are listed at a combined value of $1.8 million on tax rolls and are appraised for $1.7 million. They fetched $901,363 at resale.
A house at 1654 Macomber St. in central Toledo sold in May for $3,000, or 11 percent of the auction estimate and value listed on tax rolls.
Another central city property, at 1438 Prospect Ave., is listed at $21,000 on tax rolls and appraised at $24,000 for the auction but sold in May for $5,025.
Although such wide disparities were relatively rare, it wasn't uncommon for houses to sell for half of appraisals and tax values.
The house at 2705 Sherbrooke Rd. in West Toledo sold in April for $51,700, which compared to an appraisal of $115,000 and a taxation value of $181,500.
A condo unit at 2741 Pin Oak Dr. in southwest Toledo appraised at $69,000 and is listed at $87,500 for taxation purposes but sold for $42,000 in April.
A three-bedroom house built in 1976 at 327 San Jose Dr. in southwest Toledo fetched $55,138 in March after appraising at $104,000 and being listed at $105,800 on tax rolls.
Some selling prices were closer to the mark.
A home at 6906 Shooters Hill Rd. in Sylvania Township sold in March for $197,500, which compared to an appraisal of $229,000 and a tax value of $224,000.
A property at 3036 Pickle Rd. in Oregon appraised for $114,000 and with a tax value of $122,800 brought $83,900 at a sale in January.
Many of the houses involved in the 2007 sale were scooped up by investors.
"If the price is low enough, I don't see how a person can lose," said Gary Mulally, who owns rental properties in Jerome, Idaho.
He plunked down $3,000 sight unseen for the Macomber Street house, which he plans to fix up and sell.
He said he learned about the Toledo property "from friends that know how to get a hold of foreclosures."
He declined to be more specific. He has not seen the house, but has found a real estate agent to market it.
His purchase of the house was the second since it was acquired for $3,500 by mortgage giant Fannie Mae in the foreclosure sale.
Another buyer is Derrick Fuller, of One Way Properties LLC in Toledo.
He snapped up a home in Spencer Township for $12,000 that appraised for $70,000.
He buys to resell and to rent.
He bought 100 foreclosed houses last year but said he expects to purchase fewer than half that number in 2008. As the nation's credit crisis has deepened, most banks in the area have eliminated or reduced lending to real estate investors.
He often sees foreclosed properties that sell for a third of their taxing value.
"There are many deals," he said. "But these are distressed homes. Many need extensive renovations."
When houses sell for less than values used to determine property taxes, the county doesn't automatically make adjustments to reflect the selling price, the auditor said.
But her office welcomes challenges from homeowners who believe a value is inflated, she said.
Protests will be considered until Oct. 1 for 2008 taxes, which will be collected next year.
A number of properties examined by The Blade are the subject of challenges, she said.
"We have to assess each property individually," Ms. Lopez said.
"If we find it was involved in a distressed sale and is worth $10,000 or $50,000 more, we're going to make a recommendation for fair and equitable value for that property."
Contact Gary Pakulski at:
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