The Virginia Supreme Court heard oral arguments in the case 191387 Galloway, et al. v. County of Northampton, et al.
The case was brought because there is substantial evidence that Northampton County (NC) failed to make assessments with uniformity from 2009 – 2014 and failed to comply with required professional standards in 2012, 2013 and 2014, as shown by the following pleading:
The Supreme Court recording of arguements is below:
In fact, NC failed to determine the market value of the referenced properties between 2009 and 2014, because its market sales data was not current. Reliance on sales data prior to the 2007 national recession improperly gave weight to the peak pricing prior to the substantial market correction. The correction decreased market values materially from 2008 through the early years of the 2010’s.
Market evidence was readily available that Cape Charles sales activity and pricing were declining rapidly. Reliance on sales data prior to 2008, and furthermore, making no adjustments to valuations between 2008 and 2012, is evidence that NC had frozen its assessments at the peak pricing, while the actual market participants were suffering financial losses as illustrated in the 2009 and 2010 sales data. The evidence of significant market declines should have drawn immediate consideration by NC.
With the recession of 2008 causing property values in Cape Charles crashed which resulted in longer marketing times, falling prices and bank foreclosures, as well as arm’s length sales. None of this was taken into account by the County for properties that were transacted.
The Town and County used pre-2008 sales data which did not represent changes in the local marketplace whereby the prime properties had some activity, as the weaker properties experienced market rejection.
Essentially, the County locked into the market segments from pre-2008 while the local market crashed. By example, Marina Village East had virtually no arm’s length sales after mid 2005 through 2013, presenting significant pricing declines.
Northampton improperly reverted back to its last general reassessment data from 2008, and its 2012 reassessment was unsupported by current sales data; further its 2012 reassessment reflects the pre-2008 market peak as though frozen in time, not the insignificant demand and falling prices.
Fast forward, Galloway will now be able to use this data, and its expert witnesses to present to the court.
The implications of this case cannot be understated. If in fact the Town and County have been price gouging, going back to 2008, every citizen may be effected.
The County had the option to settle the case but refused. The County has paid over $200,000 to the law firm of Sands Anderson thru last month.