DECEMBER 22, 2011 ISSUE
Watauga Revaluation Is Two Years Away
Recent Revals in Avery, Ashe Saw Property Values Rise
After twice postponing it, Watauga County is required by law to conduct a property revaluation on January 1, 2014. And though it may seem obvious with a struggling real estate market, it’s still unclear where values will be two years from now.
The most recent revaluation in Watauga County was in 2006. North Carolina law requires revaluations to be conducted at least every eight years, though counties may choose to perform them more often. In 2009, Watauga County Commissioners voted to postpone the county’s scheduled property revaluation from 2010 to 2012, citing lack of sufficient sales to determine accurate property values. In March of this year, commissioners voted once again to delay.
Kelvin Byrd, Watauga County tax administrator, said county leaders want to see the market stabilize—whether that means values go up or down.
“Obviously, if the market doesn’t change, you’ll see a lot of things change, and something might not change at all,” Byrd said, referring to property values.
A lot rides on property values. The value of homes and land determines how much owners must cough up in property taxes each year. And according to Watauga County Finance Director Margaret Pierce, 51 percent of the county budget comes from property tax revenues.
Watauga County’s neighbors to the north and south have each conducted revaluations recently.
Avery County’s most recent revaluation was on January 1, 2010. The total assessed value of taxable properties in the county increased from $4.03 billion in 2009 (based on a 2006 revaluation) to $4.4 billion in 2010, an 8.3 percent increase.
As a result, county leaders voted to decrease the property tax rate from 39 cents per $100 valuation to 37 cents—a 5.1 percent rate decrease.
Avery Tax Administrator Phillip Barrier said the 2010 revaluation was based on sales from 2008 and 2009—before rising foreclosures had too much of an effect on values. The county even saw its first $5 million home sale during that period.
“Today, it’s a different story,” he noted. “We’ve reached the plateau.”
Nevertheless, Barrier said, Avery’s commissioners are committed to a four-year cycle for revaluations, with the next scheduled for 2014.
“It’s only fair,” he said.
Avery County conducted its revaluation in-house with county staff, with help from a private appraiser for commercial properties. Ashe County also conducts revaluations in-house.
Ashe conducted a revaluation on January 1, 2011, five years after the previous revaluation in 2006. Speaking Tuesday, Ashe County Tax Administrator Keith Little said he did not have the exact numbers at hand but that taxable value in the county increased about 8 or 9 percent after the revaluation.
As in Avery, Ashe commissioners voted to reduce the county property tax rate as a result, from 42.5 cents to 40 cents—a 5.9 percent rate decrease.
“Our total assessment always has an effect on the county tax rate,” Little said. “The tax rate is always based on a formula which looks at the total [county] budget and is based on how much value we have to work with.”
Little declined to speculate on why values increased.
“Any increase or decrease we might have is reflective of what’s going on in the marketplace since the last reassessment,” he said. “As much as possible, we base [values] on the last year of sales, but two years is the norm.”
Elsewhere across the state, 2011 revaluations saw value decreases or increases of smaller margins. Lake Norman News reported a 1.9 percent increase in Catawba County and a 1.5 percent decrease in Iredell County. In Lincoln County, values reportedly decreased about 5 percent in the eastern part while increasing 7 to 10 percent in the rural western portion.
Watauga County has a $64,000 contract with RS&M Appraisals to provide assistance and expertise on commercial properties for the next revaluation, though the revaluation is managed mostly in-house. The whole process of assessing some 48,000 to 50,000 parcels in the county costs between $400,000 and $500,000, Byrd estimated. Some smaller counties across the state do not have the staffing to do revaluations and contract with private appraisers for the entire operation.
If property owners want to dispute their assessed values, they may appeal before a Board of Equalization and Review. While some counties appoint members to sit on this board, in Watauga County, Byrd said, the Board of Commissioners has taken on this role. Byrd suggests that property owners provide supporting documentation with their appeals, such as a recent appraisal, but cautions that the county does not have to utilize the appellant’s appraisal.
“I don’t think two people ever come up with exactly the same value,” he said.
Currently, trends vary across Watauga County, and Byrd anticipates there will be some changes in value—more noticeably among the different types of property, such as vacant lots or resort properties. While resort areas such as Blowing Rock and Beech Mountain are saturated with housing supply, demand remains high in Boone, where prices have not deflated.
“I think the market’s hopefully stabilizing. Maybe we all have a better understanding of where it’s at right now,” he said. “I’m sure some will not be happy.”
At least one local appraiser feels there have been sufficient sales to establish values, and he said some areas will see substantial drops in value.
“We’ve had an oversupply on the market from the second home owners,” said Patrick O’Neal, staff appraiser with High Country Appraisals. “It’s been just a horrible market with over supply and low demand.
“You have a substantial loss in property values,” he said, adding that he has been adjusting anywhere from 0.5 to 1 percent per month. And though sales have decreased, he said, “there are sales out there, and there is a way of establishing values.”
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