- Last Updated on Wednesday, 31 December 2008 17:27
- Published on Wednesday, 31 December 2008 17:27
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Downward trend in assessments reflect lower home sale prices
The National Association of Realtors last week reported a huge drop in prices on existing homes.
The trend of falling home values is beginning to be reflected in King George.
That trend could continue as the financial crisis grows and the recession deepens.
According to figures released on December 23, the national median existing-home price for all housing types was $181,300 in November.
That was down 13.2 percent from November 2007 when the median was $208,800.
Regionally, in the South, existing-home sales dropped 10.9 percent to an annual pace of 1.64 million in November, and are 17.6 percent below a year ago.
The median price in the South was $154,500, which is 10.6 percent lower than November 2007.
The Code of Virginia requires each locality to periodically perform a general reassessment to determine each property’s fair market value and its equalization in value to similar properties.
The effective date of the reassessment is January 1, 2010. The last general reassessment was effective January 1, 2006.
Blue Ridge Mass Appraisal Company, LLC is currently conducting an assessment for the county that will go into effect a year from now.
Property assessment is a year-long process. Blue Ridge began the current process in October and will continue it through 2009.
The assessments will be reflected in the values adopted a year from now, in January 2010 for tax rates and collections in June & December 2010.
The first step is site visits by assessors. Over the course of the next year, site visits will eventually take assessors to all improved property in the county.
Those visits will enable them to update the value of all property in King George.
But if home prices keep falling over the course of the next year, those declines will be reflected in the updated values assigned by the assessors.
Blue Ridge reps have said the market on homes will be monitored on a monthly basis through the end of the assessment process to make further adjustments to county property values as necessary before sending the change of assessment notices next fall.
Blue Ridge project manager and appraiser Mike Didawick recently reported to the Board of Supervisors.
Didawick noted that the best way to understand the current real estate market is to view properties that have recently sold.
He explained that the value of a home is determined by analyzing recent sales of similar homes, called “comparables.”
Some of the characteristics used to determine similarity include comparing square footage, number of stories, exterior finish, basements/finished basements, number of bathrooms, heating/cooling system, fireplaces, and attached/detached garages.
As with all real estate, Didawick said that location is of primary concern when assessing the value of property.
Location features can either enhance or detract from the value of the property.
Location features that enhance value include water frontage, pleasing views or adjoining golf courses. Features that detract from value include location in a flood zone, proximity to a landfill and adjoining a junkyard
~ EFFECT OF FALLING HOME PRICES With falling home prices, homeowners with an inflated mortgage balance and a need to refinance due to an upwardly adjusting interest rate could be in a bind.
Also, those wishing to sell their houses may be facing a loss if they owe more on their mortgage than current sale prices indicate they can get.
But those who intend to stay in their homes will be little-effected by falling home prices, including the strong possibility of a lower real estate assessment that could be enacted a year from now.
That’s because when the reassessment process is over a year from now in King George, the Board of Supervisors will be presented with a calculated equalized tax rate.
If the reassessment results in lower property values, the calculated equalized tax rate will be higher than the existing tax rate.
By Phyllis Cook, Staff Reporter