New valuations, for better or for worse

As preemptive disclaimers go, this one would be

hard to miss:

“REMEMBER: RISING REAL ESTATE VALUES DO NOT MEAN RISING TAXES.”

County Assessor Jim Avery has been at the game long enough to know that when notices of new (and demonstrably higher) property valuations go out, somebody somewhere is going to take alarm – even if it doesn’t really mean they’ll be paying higher property taxes next year. Homes and land are, as Avery notes, emotionally charged commodities, “not like selling potatoes at Safeway.”

Ergo the disclaimer – IN ALL CAPS, JUST SO YOU WON’T MISS IT – appearing at the bottom of the assessor’s worksheet detailing recent changes in valuations in every corner of Kitsap County.

Avery’s point is to remind folks that the property tax bill they’ll receive in 2006 will really be a function of the actual revenue collected by local public agencies, not the value of homes or the tax rate calculated therefrom. If your city, fire, school or park district collects more dollars, you will indeed pay your share; but because those agencies can’t increase their take by more than 1 percent per year without asking the voters first, your tax bill is largely in your own hands. And as long as valuation increases are fairly uniform, there should be no particular impact on the individual’s tax burden.

That said, are the new valuations valid?

As Avery notes, the assessor’s exercise is really one of assigning market value to homes that aren’t actually on the market, based on what others down the street have been

selling for. While new valuations are largely based on recorded sales, the physical inspections of properties (and therefore, judgment calls) also come into play. If you happened to build a new deck or cut down some trees to improve your view, it’s probably going to come to the appraiser’s notice sooner or later, and you will receive a higher valuation. (We would, we should note, gladly give space in these pages for Mr. Avery to explain the valuation process in more detail; we suspect we’d all learn quite a bit.)

So some might question the extent to which the new, “official” property valuations reflect what’s actually going on in the real estate market. We put the question to a local real estate broker, a gentleman widely considered in the know on such matters; he was so kind as to produce, in short order, some statistics on Bainbridge Island home sales for the past two years-plus.

Turns out that in 2003, the average sales price of a single-family residence on Bainbridge Island was $481,758. A year later, that figure was $551,462. And based on sales recorded during the first four months of this year, the average island home price is now $635,153.

“Prices are going up, there’s no doubt about it,” our broker friend said, “and they’re going up a lot.”

You can do the math for yourself, but the assessor’s new valuations appear to be, for better or worse, in the ballpark.

Congratulations. You’re worth more than you thought.

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