County assessor updates board on declining real estate values
Posted on Saturday, August 2, 2008
Assessed real estate values are decreasing for some Washington County residents due to drops in prices of neighboring properties.
Washington County Assessor Lee Ann Kizzar told members of the Board of Equalization about recent efforts to reduce the appraisals of about 7, 200 parcels in the county. She talked to the board during its organizational meeting Friday before it meets next week to conduct its annual hearings.
Kizzar talked about how the volume of real estate sales was high in 2005 and 2006 but came down significantly in 2007.
The Assessor’s Office on Wednesday sent letters to the owners of 7, 204 parcels in Washington County to inform them that the 2008 appraised values of their homes are being reduced because of the housing market in their neighborhoods.
“ The Assessor’s Office has to be commended, ” board Chairman Wesley Cannon said during the meeting Friday. “ I think in the longrun the general public will appreciate it. ”
The board conducts hearings each year to review property values for Washington County residents. It has three meetings scheduled for next week, and property owners will have an opportunity to discuss assessed values with the board members.
The meetings are scheduled to begin at 9 a. m. Monday, Wednesday and Thursday in the conference room of the Washington County Assessor’s Office. Homeowners can attend these meetings or schedule an appointment to meet with the board. The last appointment that can be made is 4: 30 p. m. on Aug. 18.
Board members sworn in for this session were Cannon, Luther Freeman and Joe Bailey, all of Fayetteville; Carl Johnson of Springdale; and Mildred Runkle of Winslow. There are no new mem- bers. Cannon was re-elected as the board’s chairman.
Of the four counties that produce 40 percent of real estate tax revenue in the state, Washington County is the only one that had to reappraise in 2007. The others are on a different schedule.
“ Our problem was we hit that bubble, ” Kizzar said of the 2007 reappraisal, which followed the 2006 peak in the housing market.
Kizzar received the goahead in early July from the Board of Equalization to try to equalize the values of properties affected by the decreasing home prices.
The letters explain to the taxpayers “ what we did and why we did it, ” Kizzar said earlier this week. The parcels are scattered all over the county, she said, but tend to be in more newly developed areas of Fayetteville and Springdale. The 7, 204 parcels were identified for reductions after examining the prices of homes sold last year and comparing them with the appraised values of homes in the same neighborhoods on Jan. 1, 2007. The reductions in the actual tax bills average about $ 40 per parcel, Kizzar said.
The appraisal issue Washington County does a county-wide reappraisal every three years. Jan. 1, 2007, was the end of Washington County’s three-year reappraisal process that began in 2004.
Originally, the reappraisals were based on 2006 values. Kizzar and her staff, however, began looking at sales that occurred after Jan. 1, 2007, and noted they were lower than they had been in 2006.
In the analysis, it was found that average values compared to average sales were “ pretty well right on the money, ” Kizzar said in an interview this week. But neighborhood to neighborhood, she said, some were over-appraised.
Those are the parcels that are talked about in the letters sent Wednesday to property owners.
There are about 95, 000 parcels in the county, and data was run on the entire county, Kizzar said Friday.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said earlier this week that she is comfortable saying taxation should fairly represent values.
“ It’s not a bad thing to be after the fair market value of the property, ” she said. “ The question is more about timing. ”
The three-year reappraisal cycle allows for a smoother process, she said.
In 2006, “ the market looked very different than it does now, ” Deck said. “ That being said, I think (the reappraisal ) opens up a can of worms that clearly market values are dynamic and they change all the time, not just going down, but also going up, and to do something extraordinary for just some of the parcels may lead to problems later on. I don’t know that.
“ I’m just thinking about it. Obviously, it’s a very expensive thing to go out and reappraise properties. Is the perception of problems with the previously appraised values sufficient to warrant extraordinary measures ? (Kizzar ) clearly thought it was. ”
In Northwest Arkansas, Deck said, “ we’ve certainly seen sales decline precipitously. ”
The prices had to adjust, she said.
When looking at averages, she said, it masks the fact that price differentials matter.
“ Location matters, and some properties hold their value or increase even as others are declining, ” she said.
Kizzar said the idea is to maintain equity between Washington County’s citizens and citizens of other counties, as well as among citizens in Washington County.
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