AUBURN — More than three-quarters of property sales or transfers in the city during the last fiscal year were foreclosures or short sales, according to the city assessor.

Assessor Renee Lachapelle said the city recorded 584 property transfers in the 2010-11 fiscal year. Of those, 451 were foreclosures, short sales or bank sales. The remaining 133 were considered fair market sales.

But even so, those sales didn’t change the city’s assessed valuation. According to state law, only fair market sales are used to calculate the city’s assessed value. Short sales and foreclosures don’t count, she said.

“We have to use market sales,” Lachapelle said. “That assumes it is an arm’s-length transaction in the open market and not affected by undue stimulus. When you have circumstances, like the house is vacant or the owners just need to get out of it because of a bad market or job loss, those are not counted.”

Lewiston Assessor Joe Grube said the rate was similar in his city. Of 618 Lewiston sales reported by the state, 198 counted as fair market sales. 

Those fair market sales are used to calculate a city’s assessed value. That value is used, in turn, to figure a city’s property tax rate and individual property tax payments.

According to the state’s rating, Auburn’s assessed value is only 3 percent higher than market value — well within guidelines. But it can be confusing for property owners and taxpayers who can’t sell their homes or even refinance for the amount at which their homes are assessed for taxes.

“That’s a big one for me, because I think that’s a very real impact,” Councilor Mike Farrell said. “It’s hard for me to tell people in New Auburn that their house is valued at this amount because a guy across the street is selling higher. But there’s five other houses that have been foreclosed upon and we’re not going to take those into consideration.”

Farrell said it’s one of many property issues he hopes state legislators will tackle this year.

“Something needs to be done, because this is a vicious circle,” Farrell said. “Where does all the money go? Look at the money we’re all paying, and what do we get for it?”

Auburn’s assessed value decreased slightly between the 2010 and 2011 fiscal years, from $2.05 billion to $1.99 billion.

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