At Property Tax Protest in 2009 we achieved some significant –  15% to 20% — reductions in higher end home values from Appraisal Review Boards and through Arbitration after an ARB hearing.  We expect the trend to continue into 2010, then moderate in succeeding years.

Last year between a third and half of all homes sold nationwide were “distressed”, mainly those acquired with sub prime mortgages which enabled the sale of lower to mid range priced properties.  But now low end homes are a declining percentage of all foreclosures while mid to upper end properties are increasing their share according to data from Zillow.com.

In 2010 middle to upper end priced homes may be in line to take their share of the market decline.  In San Francisco, for example, higher end home values at year end were down about 25% from their peak compared to 39% for the broader market, according to the S&P/Case Schiller Home Price Index.  That indicates the higher end of the market may be in for significant price declines, especially since adjustable rate mortgages could rise either due to contractual resets or rising interest rates.  Adjustable rate mortgages enabled the sale of many high end homes to buyers who might otherwise not have qualified; if rates rise those who stretched may not be able to hold on.

Texans have been spared the highs and lows experienced elsewhere such as in Florida, Arizona and California.  But they are not exempt from nationwide trends, even if on a more moderate scale.  For owners of higher end homes whose values have declined a reduction in property taxes may be one part of the answer to the question, “How Can I Survive?”