“There’s a complete reversal we’ve seen now in the past six years, from a decrease to now an increase,” Keith said.
The increases are largely attributed to a housing market Keith described as “robust on steroids.”
When including commercial properties, values countywide climbed 7% bringing the total valuation of about 252,000 parcels in the county to roughly $28 billion, an increase of about $1.8 billion over the last triennial review in 2017, Keith said. The increase is the largest since 2005.
Residential property values climbed 7.4% reaching about $21.2 billion. Commercial properties rose 5.9% to $6.4 billion, according to the auditor’s tentative numbers. The remainder is the value of land used for certain agricultural purposes.
Keith said values increased in 75% of the county’s neighborhoods. Gains were seen in 837 neighborhoods. But 277 neighborhoods saw decreases, some still to recover from the Great Recession, Keith said.
“We still have neighborhoods that lost value. So we’re not out of the woods yet,” he said. “There are still areas of the community that are still struggling.”
About 30% of neighborhoods — or 332 — showed double-digit percentage increases, according to the auditor’s office.
But a 10% or 15% increase in value doesn’t mean a homeowner’s taxes will increase by that percentage, Keith said.
“I won’t say there won’t be any increase, but there won’t be that level of increase,” he said.
Public safety, school and other tax levies stay generally level unless citizens vote an increase, Keith said. Inside millage, a smaller portion of the overall real estate tax bill can’t exceed 10 mills by law, will increase or decrease based on the valuation, he said.
The auditor’s office will present more specific data to jurisdictions next week.
Tentative value notices headed to property owners next week will include information on how to appeal a valuation, Keith said. The new values will be firmed up later this year and affect tax bills beginning in January 2021.
Memorial Day 2019 tornadoes wiped out about $46 million in tax value, which is factored into the county’s total tentative valuation, Keith said. About 1,200 property owners who experienced tornado damage have received property tax relief. Owners of tornado-damaged properties have until Aug. 23 to file a complaint with the Board of Revision to be eligible for a partial refund in the property taxes they pay this year.
The robust housing market included record sales in 2018 with 9,219 valid sales, dropping only slightly last year.
Keith said it’s uncertain whether the trend will continue.
“We had a little bit of fall off in April and May, but in June, we’re back above last year’s totals in terms of actual sale transactions,” he said.
While the market is strong at the moment, it’s unclear whether the pandemic will spur future job loses and foreclosures, Keith said.
“I know everyone is fearful with the number of people out of work, with a loss of household income, there’s going to be some impact to the real estate market,” he said.
County auditors are required to do a full general reappraisal once in every six years. The auditor and a qualified appraiser are required to view and appraise every property. On the third year in between reappraisals, the auditor is required to perform a triennial update, last completed in Montgomery County in 2017.
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