Those pesky 2012 property tax assessments
(Side question of the month: In the last 6 months, how many homes sold for $1,500,000 or more in King, Snohomish, Island, San Juan and 5 other counties? Answer is imbedded in this article, but take a guess before reading.)
In June, Snohomish County homeowners received their 2012 Property Tax valuations; few are pleased. The value of taxable property in Snohomish County dropped by more than $8 billion from last year – a nearly 9 percent drop in the tax base.
The decline is a big number for the county, but proportionately for homeowners it’s a confirmation of what has already been occurring around them: a huge decline in individual property values. (Property taxes are not the subject of this article.)
The assessor’s 2012 estimate of value for your home reflects 2010 market sales. Their analysis has become a more precise over past years as refining data has advanced. That and the fact that predicting estimated future wildly increasing values (2004, 2005, 2006... etc) is more difficult than falling price data.
“2011 Snohomish County Wide Mass Appraisal June 1st Report” (71 pages) is available on the web. If like me, your eyes glaze over with too many statistics, then here’s the bottom line: there has been a 12.4 percent loss in property values from 2010.
Neither the tax assessor, real estate broker, nor your bank caused the decline of home values.
Nearby home sales, whether foreclosures, short sales or just plain Willie & Maude’s down-the-drain equity are driving this boat now, even though it wasn’t the catalyst, as we all know.
“But they don’t know that we have new granite countertops and brand-new carpet. This can’t be accurate. They didn’t come in our home!”
Maybe those upgrades will help a buyer to buy, but an increase in valuation isn’t usually affected unless your home is greatly enlarged or it was a tear-down to begin with.
In days past, the meteoric rise in values made our tax valuations a moot point. They were all over the board. But do current tax valuations matter when selling property? To a certain degree, yes.
Buyers, brokers and appraisers look to the “tax assessed value” at the beginning of their considerations. Of course, a case can be built for higher than tax assessed value, but as these assessors refine their data devices much over tax assessed value is an uphill battle at times.
Case in point: Mukilteo had 19 closed sales in June: Nine of those were within $20,000 plus or minus of the 2010 assessed valuations, seven sales were below tax assessed values by $38,000 to $111,000.
Only one sale was substantially higher by $68,000. That does not bode well for properties currently listed for $50,000 to even $200,000 higher than their tax assessments.
Cindy Portman and her staff are doing an excellent job in accurately measuring and predicting our market in Snohomish County. You can take issue if you must with your taxes, but very difficult to do on market values.
All said, there certainly are exceptions to this trend. Maybe yours is one.
But let’s balance all this bad news with some good old Puget Sound Reality Show escapism. The answer to the opening question is that in the first six months of 2011, there were 184 residential properties that sold for over $1.5 million! (Including 25 condos).
Seventy of those were between $2 and 7 million – 138 were in King County and eight other counties took home. Snohomish County’s share was six – three Edmonds condos and a residence, one Woodway and one Mill Creek.
Additionally, there was one stand-alone sale for $14 million on Hunts Pointe Bellevue – but that was just a single, residential, estate lot... and there’s still six months left in 2011.
Everyone should feel much better knowing that that 2 percent of us / them are doing just fine!Elizabeth Erickson is owner and designated broker of Gallery Homes Real Estate. Contact her at email@example.com or at the office: 425-212-4300 or direct: 425-508-1405, or go to www.galleryhomesre.com.