Property owners in Haywood County faced a Catch 22 when their new property values arrived in the mail last week.

If your value went up, it’s nice to know the lackluster real estate market didn’t undermine your home’s worth. The downside will be higher property taxes. Those who saw their value go down will likely pay less in taxes — but it’s hard to be excited that your home isn’t worth as much as it used to be.

The total value of property in the county remained flat. If you add it all up — the value of every home, lot and tract of land — it amounts to $6.791 billion, an increase of less than 1 percent over last year’s total value of $6.787 billion.

The flat figures mean the county escaped the brunt of the national real estate downturn. As a result, the county won’t have to hike the property tax rate to bring in the same amount of money as last year.

“I am relieved there were no gigantic swings,” Commissioner Mark Swanger said.

Had property values gone down as a whole, the tax rate would have to go up for the county to collect the same amount as last year. Commissioners would be hard-pressed to explain the nuance of raising the tax rate, but not really raising taxes given lower property values.

Commissioners have been sparred that dilemma, but only to some degree.

Unfortunately, Swanger pointed out that sales tax collected by the county might be down as consumers are buying less. And the state is poised to stick the county with more of the tab for everything from road paving to education, Swanger said.

Commissioners may be faced with raising property taxes to make up for these shortfalls — unless they want to cut the county’s budget for the third year in a row, something that may not be possible, they said.

“We have already reduced it almost as much as we possibly can,” said Commissioner Kirk Kirkpatrick.

If the state cuts education, does the county hang the schools out to dry or pick up the cost locally?

“We have to wait and see what Raleigh does and then decide as a community and as commissioners, what do people want? What do you want your government to do?” Kirkpatrick said.

Those tough decisions will be facing the county over the next few months. A budget — and tax rate — will be hashed out by July 1 when the new fiscal year starts. Then, and only then, can homeowners pull out their calculators and know for sure what their new property values will mean for their tax bill.

 

Why the revaluation?

In North Carolina, counties are required to conduct a mass appraisal of real estate every eight years — called a revaluation, or “reval” for short. Property taxes are based on property values — the more your property is worth the more taxes you pay. The reval is intended to level the playing field, bringing the county’s assessed value of your property in line with the true market value so everyone is paying their fair share come tax day.

 

How do you calculate taxes?

Here’s how to figure county taxes at the current tax rate at 51.4 cents for every $100 of property value. Divide your property value by $100 then multiply by 0.514. This doesn’t include fire taxes for your fire district or town taxes if you live in the town limits. Bear in mind commissioners won’t set this year’s final tax rate until June.

When Mollie Weaver put her house on the market two weeks ago, she was bracing for the worst. She’d been here before, for two years in fact, when her house languished on the market from 2007 to 2009.

“Of course that was when things were rapidly changing,” Weaver said. “We learned from that.”

This time, the mom of three got serious.

“In the higher price ranges, there is stiff competition. There are brand new homes that haven’t sold, and if you can’t compete with that you have to slash down your price,” Weaver said.

ALSO: New values based on hyperlocal formula

So she did, and Weaver’s house in the Iron Duff area of Haywood County was under contract within a day.

She’s selling at a loss compared to where she bought it in 2006, but hopes to make up the difference when she finds a new house: “We sell at a bargain and we buy at bargain.”

Weaver’s story sounds familiar to anyone who’s tried to buy or sell and home in the mountains.

But now for the first, time there are hard-and-fast numbers painting a full picture of real estate values in Haywood County.

Every home, lot and tract of land in the county — all 50,000 of them — have been reappraised to reflect the current real estate market. New values were sent to property owners last week, and many learned their property was worth less than the last countywide appraisal five years ago.

In the past, you could count on values to go up with the exercise. But it’s a different ball game this time, and many anticipated a dramatic decline in property values.

Nationally, the recession has wreaked havoc on the real estate market. A glut of homes coupled with a dearth of buyers forced sellers to slash prices, and real estate values entered a downward spiral.

“To be competitive, to sell your house, you have to undersell the guy down the street and that’s what’s driving your market down,” said Randy Siske, a Realtor and president of the Haywood County Board of Realtors.

ALSO: What new property values mean for your taxes

But the property reval carried rather pleasant surprise in Haywood County when it came out last week.

“Overall we did not have a total collapse here as some other markets did. You don’t see things crippled here,” said David Francis, director of the county tax department

The total value of property — if you add up every home, business and piece of land — essentially remained flat. Roughly half the property owners in Haywood County saw their values go up, and half saw them drop, Francis said.

Keith Gibson, a private property appraiser in Haywood County, said pegging property values has been extremely difficult lately — the most difficult he’s experienced in his 25 years in the business.

Appraisals are dictated by the selling price of similar property. During the boom years, Gibson followed suit with the high prices in the market place, but he often found himself shaking his head over his own appraisals.

“We were seeing things that were unbelievable,” Gibson said. “We made predictions that this cannot go on like this.”

And indeed it didn’t. Property values fell with the recession, and fast, making it hard to know whether last month’s sale was a still an accurate yardstick for today’s appraisal.

“I have never seen values go down in Haywood County until the last two years,” Gibson said.

Fearing the real estate market was still in too much flux to accurately peg property values, Francis last year urged commissioners to postpone the reval until 2012. They had already postponed it one year, from 2010 to 2011.

“We collectively agreed to postpone it for a year because we were afraid there might not be enough valid sales to do as meaningful and accurate a revaluation as possible,” Commissioner Mark Swanger said.

Tax Assessor Judy Ballard didn’t have to dig deep to illustrate the problem. She randomly picked Triple Creek subdivision from a stack of property assessments. In the reval five years ago, appraisers had a long list of lot sales to base their estimates on — 25 of the 40 parcels in the subdivision had sold in the prior two years.

But this time, there were only four recent sales in Triple Creek, and they all fell below their former values.

Francis thought it wouldn’t hurt to delay the reval yet another year, as several neighboring counties have chosen to do. Jackson, Macon and Buncombe counties postponed theirs until 2013, and Swain until 2012.

But commissioners decided to take the plunge in Haywood this year.

Doing so keeps the reval from falling in an election year — although Swanger said this wasn’t the reason. Revals can be contentious and politically charged since tinkering with the tax rate will usually follow on its heels. But Swanger said the county had already entered a contract with an appraisal firm and delaying it could have cost the county fees.

 

Fewer appeals

In the past, angry property owners flooded the county tax office after seeing their new values, outraged by the sharp increase — and fearing the higher property taxes that would follow.

But last week, a county appraiser stationed at the tax window to field inquiries was sitting idle. A basket labeled “property appeals here” was empty, and a jar of fresh pens on the window ledge was untouched.

The county hasn’t seen nearly as many appeals this time, Francis said. For starters, “sticker shock” of rising real estate that played such a large role in past revals is obviously absent this time. But the values are likely more accurate than they’ve ever been this time, thanks to a new, highly engineered formula (see related article.)

“The county had a huge job to do and I think they did a pretty darn good job overall,” said Realtor Phil Ferguson, the owner/broker of The Seller’s Agency.

Ferguson said the county’s new values for his property were in the “ballpark,” and that is actually impressive.

“When they have 50,000 properties to go out and evaluate, there is no way to do it perfectly,” Ferguson said.

The county’s team appraises homes from the curb, stopping at each one but not going in. There’s a lot they might miss inside, said Gibson.

“The counter tops, the doorknobs, whether it has 10-foot ceilings, hardwood floors,” Gibson rattled off a few. Even whether a house has stained oak woodwork instead of painted baseboards and door jambs.

This year, the county is actually seeing appeals from people who think their new values are too low. While it seems odd to lobby for a higher appraisal — since higher values mean higher taxes — that’s exactly what some people are doing, Francis said.

He spoke to one property owner who saw a tract of land — land took the biggest hit in values — fall from $550,000 to $100,000.

“She was very concerned,” Francis said.

Francis has also fielded calls from homeowners who owe more on their mortgages than it is now worth. They want to know whether the bank will come knocking, asking the upside-down mortgage holders to pony up the difference. Francis assured them that’s not the case.

 

The winners and losers

While generalizations don’t apply to every house in every neighborhood, there are some trends.

•  Commercial went up, especially in downtown Waynesville (see chart).

• Tracts of land went down substantially. Land, once considered a mini-gold mine, is no longer in demand by developers. Plus, banks have balked at financing land.

• Lots in subdivisions went down, also due to old fashioned supply and demand. While there’s hundreds of lots for sale, the tanked economy halted the mountain migration of retiring baby boomers.

• Property closer to town held its value or went up compared to rural areas. On average, property values fell in Crabtree, Iron Duff, Jonathan Creek, Fines Creek and the like, while they went up in the towns of Waynesville and Canton and in areas closer to town.

• High-end homes went down, while lower priced homes went up. It’s no surprise, since expensive homes have been in less demand while affordable ones are highly sought.

“On a sliding scale, the higher you go the greater decrease you would find in price,” said Kirk Kirkpatrick, a county commissioner and attorney who has a bird’s eye view of the market through real estate closings.

Kirkpatrick’s own house in Laurel Ridge went from a value of $800,000 in 2006 to $650,000 in the recent reval.

But a small home he owns on the outskirts of Canton went up from $78,000 to $100,000 — a case in point that lower priced homes have gone up compared to expensive ones.

There’s a side effect come tax day, however. High-end property owners will no longer pick up as much of the county’s property tax tab as they once did. Median home owners will see their share of tax burden go up comparatively.

“That is an unfortunate outcome of what this economy has done,” Swanger said.

Of course, the county was lucky to lean on the higher-valued properties for the years that it did.

“I don’t think there is any question the real estate bubble artificially inflated the value of the upper-end homes. They are now back to where they should have been all along,” Swanger said.

 

Turn around coming

Realtor Randy Siske said it is important to take the long view. If you only look at how much your property went down since the last reval in 2006, you ignore the dramatic rise leading up to 2006. In the first half of the decade, property values rose by so much that even though they have taken a step back now, it’s more like one step back for two steps forward.

There has still be a net gain in value over the decade as a whole — although it’s hardly consolation to those who bought at the market’s peak.

Real estate watchers see an uptick on the horizon. After two years of decline, the number of homes sold last year leveled off (see graph).

“It has started to stir now. There have been several good closings in the last couple of months,” Gibson said.

Before prices can fully recover, however, the number of homes on the market needs to be thinned out.

“There is still a lot of inventory on the market. If people don’t absolutely have to sell right now they probably shouldn’t,” Ferguson said.

The converse is certainly true.

“Now is a great time to buy,” Ferguson said.

 

 

What went up, what went down

Median and lower-priced in-town homes held their value compared to tracts of land and mountainside subdivisions, which fell in value. Commercial went up nearly universally. Here’s a break down by geographic region of the county.

Town of Waynesville: +4.22%
Waynesville outskirts: -0.29%
Town of Canton: +1.85%
Beaverdam (Canton outskirts): +3.86%
Town of Maggie: -0.67%
Ivy Hill (Maggie outskirts): +2.76%
Town of Clyde: +6.75%
Clyde outskirts: -2.25%
Jonathan Creek: -0.43%
Crabtree: -3.92%
Iron Duff: -9.99%
Fines Creek: -11.95%
White Oak: -17.93%
Cataloochee: -14.39%
Lake Logan: +1.49%
East Fork: -3.17%

Commercial
Waynesville downtown commercial: +27.9%
Canton downtown commercial: +14.6%
Maggie Valley downtown commercial: +8.8%
Clyde downtown commercial: +3.8%

It’s what everyone wants to know: is their neighbor’s house worth more or less than their own?

It’s not hard to find out at the county’s mapping site, where there’s a plethora of property revaluation data to keep even the most obsessed followers of local real estate busy for days.

Here’s how to navigate the county’s online mapping and tax information.

 
How to view property information:

• Go to http://maps.haywoodnc.net/gisweb/default.htm. (Or, from Haywood County’s home page, click on “maps” on the left.

• Search for your parcel by name, or click on “PIN” to search using the PIN number from your property notice.

• Your property will be highlighted in blue. You can also see your total assessed value, acreage, and so forth.

• For more complete details of the property, such as number of bedrooms, heated square feet, etc., click on “view tax card” on the lower left.

• To see the value of your neighbors’ property, click on “adjoiners” on the lower left. A list of neighboring parcels will appear. As you scroll over the list, the parcel on the map will be highlighted. Click “details” for the parcel you want to see info for. Click “back to search results” to get back to the list.

• To see the details of any parcel, first click on the “identify” button across the top, then click on the parcel you want to see.

• To move around your neighborhood, click on the symbol of the hand across the top and then use the tool to drag the map around.

 
How to find recent real estate sales:

• To see what recent sales in your neighborhood were used as a baseline for your property revaluation, pull up your own parcel (using directions above.)

• Click on “select viewable layers” (in the black bar just above the map).

• In the list on the left hand side, check the boxes for “revaluation neighborhoods” and “valid sales.” (Don’t uncheck anything that is already checked.)

• Recent sales used to determine property values in your neighborhood will be outlined in red. You may have to zoom out to see them.

• To see the details of any of the parcels, first click on the “identify” button across the top, then click on the parcel you want to see.

 
How to find old property values:

• Only the latest property values from the revaluation show up with the parcels on the map site.

• To find the old values for a parcel, go to http://www.haywoodnc.net/index.php?option=com_content&view=article&id=960&Itemid=134 (Or, from Haywood County’s home page, click on “taxes online” on the left side.

• Type in the name of the property owner.

• If the property owner owns multiple parcels, they will all come up and you will then have to select the one you want.

• When you select a property from the list, last year’s tax card will come up, which shows the value of the property last year.

In a we-were-really-just-kidding-around reversal, Jackson County commissioners this week decided to delay their previous decision to delay property revaluation.

A draft resolution to push back the countywide appraisal from next year to 2016 was thoughtfully included by county staff in commissioners’ and media’s agenda packets, but was ignored as commissioners by collective consensus shied away.

Commissioner Mark Jones, a Democrat who lives in the Cashiers area, acknowledged he’d gotten plenty of emails and phone calls from constituents on the subject. The market value of high-priced lots and homes are destined to fall in a countywide revaluation. Delaying the reval means the county can continue taxing high-end properties on a book value that is no longer realistic. But going forward with it would shift property tax burden to median-priced properties.

Chairman Jack Debnam, a real-estate agent in real life, said his change of heart was from a conviction the county needed to see the results of revaluations under way in Haywood and Henderson counties before making such a decision.

Tax Assessor Bobby McMahan had recommended the delay. During a prior board meeting, McMahan cited the extreme downturn of the real-estate market and the difficulty of accurately determining market value.

The purpose of a revaluation is to determine fair market value for tax reasons.

With a clipboard under one arm and a giant measuring spool under the other, Greg West climbed into a county-marked truck last Wednesday, cranked the engine and consulted a large Waynesville map on the seat beside him.

“Today we’re hitting Blink Bonny,” he said, planting an index finger on street in a traditional middle class suburb.

West would spend the next eight hours slowly cruising Blink Bonny’s neighborhood streets, eyeing each house from the curb or even loitering in the driveway for telltale signs of its worth.

If anyone’s home, they might mistake him for a stalker. But in fact West is part of a team of Haywood County property appraisers tasked with assigning a new dollar value to each home, lot and tract of land — a dollar value which in turn will determine how much you pay in property taxes.

It’s been five years since the last countywide property assessment. In the past, you could count on values to go up with each reval, but it’s a different ballgame this time. The volatile real estate market has made it tougher for West and his compatriots to pin down accurate values.

With fewer homes selling, there’s less of a baseline to go by. And just because a home sold for one price six months ago doesn’t mean that’s still what it is worth today.

The county essentially wrote its own computer program to calculate property values, taking dozens of variables into account before spitting out a number. The finely-customized formula carves the county up into 700 neighborhoods of like homes. It was lot of work on the front end — entering not just the number of bedrooms, square footage and whether a home has a garage — but also the school district, proximity to town parks or mountain views.

West’s property drive-by is now a time of reckoning as the three-year process concludes. West and the rest of his team are laying a pair of human eyes on each house to make sure their computer-generated values are right.

The property appraisers are in the home stretch of that task, having visited nearly all the county’s 50,000 parcels from Crabtree to Cruso, from Balsam to Beaverdam, from Max Patch to Maggie.

 

The verdict so far?

“It’s been fairly accurate. We put quite a bit of work into it with neighborhood delineation. It gave us a pretty good start,” West said.

Testing the formula is not hard. They visit homes in the neighborhood that have actually sold and compare the actual selling price to the computer-generated value.

In Blink Bonny, West’s first test of their formula was a 3.5-acre tract. The computer pegged its market value at $77,800. It recently sold for $77,500, a mere $300 difference.

“Our formula fell right on the money,” said Ron McCarthy, a property appraisal consultant with RSN Appraisal assisting the county with the revaluation.

McCarthy downplayed any role luck played. They are just that good, he said.

“Luck is the residue of design,” McCarthy quoted.

But to make sure, West pointed his car a couple of streets over where a home had recently sold. The computer formula put the home at $315,000 but it sold in real life for $365,000. Suddenly things weren’t looking so rosy. West set out to uncover the discrepancy.  

He pored over the county’s data sheets for the home and found the culprit. It had been given a quality grade of average — a “C” on a scale from F to A+.

But this three-story house sported stacked stone, beadboard ceilings in a wrap-around porch, octagon attic windows and other classy features. Compared to the brick ranch homes on the rest of the street, a “C” rating was too low.

He changed the quality to a B+. Running the formula again but with the corrected data, it came up within a few thousand dollars of nailing the real selling price.

West was relieved. The formula itself wasn’t wrong — just the data that was plugged into it. With several dozen variables factored into the formula, if any of them are wrong, the value it spits out will likewise be wrong.

And that’s precisely West’s job during the drive-bys: to ensure the underlying data for each house is right.

Does the home have a new garage or deck? Has it fallen into disrepair? Is it junked up with a sofa on the front porch? Has the gravel driveway now been paved?

At one home, West did a double-take after spying a second-story over the garage with curtains and blinds visible inside the window.

“Looks like they added a bonus room,” West said, something his sketch of the home in the county’s records didn’t show.

West recalibrate the home’s square feet, triggering a higher value.

Three doors up, West’s keen eye struck again. A brick patio near the front door seemed in mint condition — no moss stains on the pavers, which you’d expect with a ‘70s era house. Either they had recently invested in a pressure washer or the patio was new.

West lifted his tape measure from the back seat and climbed out of the truck. He rung the bell and met a particularly helpful homeowner who not only confirmed that the front patio was new but volunteered that there was another new patio out back. Both would boost the home’s value.

“He had a keen eye to notice that,” McCarthy said of West’s detective work. “That’s why we do the drive-by.”

McCarthy put his own skills to work at the next house in a just-for-fun blind match-up against the computer formula. He sized up the house from the car window, glanced at the sketch of its footprint and threw out his best guess. He was just a few thousand dollars off from the computer-generated value of $300,000.

That likewise bodes well for the county’s modeling — the computer formula came up with the same value as a seasoned appraiser on the ground.

Yet there’s all sorts of factors that might lead appraisers to tweak your home value during the drive-bys. If the neighborhood is uniform — homes of same quality and condition — it’s an easy day.

“If it’s in-town homes on quarter-acre lots, you can just go bam, bam, bam, bam,” West said.

But there’s usually more variation than that.

New windows and a freshly shingled roof? This could earn you brownie points for your home’s condition, and a slight bump in value. Sagging gutters and mildewed sills could bring you down a notch.

“This is like the quality control,” McCarthy said of their work.

The labor intensive process can seem never ending, and indeed as soon as this reval is finished they county will soon start ramping up for the next one another four or five years away.

 

Attention Haywood County property owners

Start watching your mailbox in March for a notice from the county reflecting the new and current market value of your home.

In North Carolina, counties are required to reassess property values every few years. The revaluation — or “reval” — is intended to level the playing field, bringing the county’s assessed value of your property in line with the true market value so everyone is paying their fair share come tax day.

Don’t assume that your property taxes will go up or down just because your property values do, however. Haywood County commissioners won’t set the actual tax rate until June. The tax rate is then applied to your property value to determine your tax bill for 2011.

With a clipboard under one arm and a giant measuring spool under the other, Greg West climbed into a county-marked truck last Wednesday, cranked the engine and consulted a large Waynesville map on the seat beside him.

“Today we’re hitting Blink Bonny,” he said, planting an index finger on a traditional middle class suburb.

West would spend the next eight hours slowly cruising their neighborhood streets, eyeing each house from the driveway for tell-tale signs of its worth. If anyone’s inside, they might easily mistake him for a stalker loitering at the curb.

West is part of the team of Haywood County property appraisers tasked with assigning a new dollar value to each home, lot and tract of land — a dollar value which in turn will determine how much you pay in property taxes.

It’s been five years since the last countywide property assessment. In the past, you could count on values to go up, but it’s a different ballgame this time. The volatile real estate market has made it tougher for West and his compatriots to pin down accurate values.

With fewer homes selling, there’s less of a baseline to go by. And just because a home sold for one price six months ago doesn’t mean that’s still what it is worth today.

The county essentially wrote its own computer program to calculate property values, taking dozens of variables into account before spitting out a number. It was lot of work on the front end and involved carving the county up into 700 neighborhoods of like homes.

West’s property drive-by is now a time of reckoning as the three-year process concludes. West is laying a pair of human eyes on each house to make sure their computer-generated value is right.

The property appraisers are in the home stretch of that task, having visited nearly all the county’s 50,000 parcels from Crabtree to Cruso, from Balsam to Beaverdam, from Max Patch to Maggie.

The verdict so far?

“It’s been fairly accurate. We put quite a bit of work into it with neighborhood delineation. It gave us a pretty good start,” West said.

Testing the formula is not hard. The first order of business with each of his daily drive-bys is to visit any homes in the neighborhood that may have actually sold. He compares the computer-generated value with what it actually sold for.

In Blink Bonny, West’s first test of their formula was a 3.5-acre tract. The county had pegged its market value at $77,800. In the real world, it recently sold for $77,500. A mere $300 apart.

“Our formula fell right on the money,” said Ron McCarthy, a property appraisal consultant with RSN Appraisal assisting the county with the revaluation.

McCarthy protested any role luck played. They are just that good, he said.

To make sure, West pointed his car a couple of streets over where a home had recently sold. The computer formula put the home at $315,000 but it sold in real life for $365,000. Suddenly things weren’t looking so rosy. West set out to uncover the discrepancy.  

West pored over the county’s data for the home and found the culprit. It had been given a quality grade of average — a “C” on a scale from F to A+.

But this three-story house sported stacked stone, beadboard ceilings in a wrap-around porch, octagon attic windows and other posh features. Compared to the brick ranch homes on the rest of the street, a “C” rating was too low.

He changed the quality to a B+. Using the same formula, but with the corrected data, it was now within a few thousand dollars.

West was relieved. The formula itself wasn’t wrong — just the data that was plugged into it

With several dozen variables factored into the formula, if any of them are wrong, the value it spits out will likewise be wrong. Thus West’s job during the drive-bys is mostly to ensure the data for each house is right.

Does the home have a new garage or deck? Has it fallen into disrepair? Is it junked up with a sofa on the front porch? Has the gravel driveway now been paved?

At one home, West spotted the telltale sign of a finished bonus room over the family’s garage: curtains and blinds over an upstairs window. The homeowners had added finished square feet, and that updated data triggered a higher value.

Three doors up, West’s keen eye struck again. A brick patio at the side of the house looked remarkably clean and lacked any sign of chipping and cracking you would expect for a patio dating to the home’s construction. Either they had recently invested in a pressure washer or the patio was new.

West lifted the tape measure from the back seat and climbed out. He rung the bell, and a particularly helpful home owner revealed that not only was the front patio new but there was another new patio out back. Both would boost the home’s value.

“He had a keen eye to notice that,” McCarthy said. “That’s why we do the drive-by.”

In a blind match-up between McCarthy and the computer formula, he sized up a house from the car window, glanced at the sketch of its footprint and threw out his best guess. He was just a few thousand off from the computer on a $300,000 house.

That likewise bodes well for the county’s modeling — the computer formula came up with the same value as a seasoned appraiser on the ground.

Yet there’s all sorts of tweaking that might lead West to adjust your home value during the drive-bys. If the neighborhood is uniform — homes of same quality and condition — it’s an easy day.

“If it’s in town homes on quarter-acre lots, you can just go bam, bam, bam, bam,” West said.

But there’s usually more variation than that.

New windows and a freshly shingled roof? This could earn you brownie points for your home’s condition, and a slight bump in value. Sagging gutters and mildew-stained flashing could bring you down a notch.

Views are particularly tricky. When the majority of a neighborhood has mountain views, the view factor is already built in to the baseline of home values.

If you are the lone house without a view, you will see your value reflect that.

Of, if you are the lone house with a view in a  neighborhood that otherwise lacks them, plan on a requisite bump up.

 

Attention Haywood County property owners

Start watching your mailbox in March for a notice from the county with your new property value reflecting the current market value of your home.

In North Carolina, counties are required to reassess property values every few years. The revaluation — or “reval” — is intended to level the playing field, bringing the county’s assessed value of your property in line with the true market value so everyone is paying their fair share when paying property taxes.

Don’t assume that your taxes will go up or down just because your property values have, however. Haywood County commissioners won’t set the actual tax rate until June.

Property owners in Haywood County will soon learn how their home and land values weathered the recession.

Every home, lot and tract of land in the county — all 50,000 of them — have been reappraised to reflect the current real estate market.

Some will see their property value go up compared to the last countywide appraisal in 2006. But a good number will find their property values have gone down. Start watching your mailbox in March for a notice from the county with new property values.

While the county isn’t yet saying what folks should expect — whether property values as a whole went up or down — it’s not rocket science to make an educated prediction.

“I would think the normal market price is going to drop, on some properties as much as 30 percent,” according to Bruce McGovern, real estate broker and owner of McGovern Property Management and Real Estate Sales.

Of course, it will vary by the type of property. Higher priced homes are more likely to drop, while median priced homes have held their value better and may see increases.

What’s likely to take the biggest hit?

“Vacant subdivision lots have come way down,” McGovern said. So has land.

McGovern pointed to 40 acres he just sold for $160,000 — far less than the $400,000 it was initially listed for four years ago.

But it’s not necessarily a bad thing, McGovern said. WNC was a victim of an inflated real estate market five years ago. Now, values are more realistic.

“I think it is a true adjustment that needed to be done,” McGovern said. “We need to have correct appraisals on property.”

 

Final countdown

A team of four county appraisers is still wrapping up the two-year process with a final drive-by of every piece of property. Snow in December and January set this final step back a few weeks, said David Francis, director of the county tax department. Francis said his staff has been working long hours, including Saturdays, to get it wrapped up.

“It is a complicated process,” Francis said. “It is something we take extremely seriously. We want to make this as accurate and as fair as possible.”

In North Carolina, counties are required to conduct a periodic mass appraisal of real estate — called a revaluation, or “reval” for short. Property taxes are based on property values — the more your property is worth the more taxes you pay. The reval is intended to level the playing field, bringing the county’s assessed value of your property in line with the true market value so everyone is paying their fair share come tax day.

Haywood County commissioners will set the property tax rate in June, which is related to but not contingent on the results of the reval.

This reval will be a different story compared to the last reval in 2006 at the height of the mountain land rush when property owners saw their values double, triple or even quadruple.

The county actually postponed its revaluation from 2010 to 2011 because the real estate market was still in flux, making it difficult for appraisers to determine new market values for property accurately.

Haywood County is one of the first mountain counties to wade into a reval since the real estate crash.

Swain County did a reval two years ago but tossed it out rather than enact it. Swain is now shooting for 2012 instead. Macon County was on schedule to do a reval this year, but postponed it until 2013.

Jackson County is still in limbo about whether and by how much to postpone its reval.

Swain County will be able to rescind its latest property revaluation — which caused property values to increase by an average of 30 percent — thanks to a bill in the General Assembly.

The county had hoped to scrap its property revaluation after commissioners feared the increased values would prove too much for local citizens to bear. A bill in the General Assembly would allow the county to just that, and instead conduct a property revaluation in another four years. However, Swain County commissioners failed to pass a resolution in support of the measure and missed the deadline for the county to be eligible.

On Monday, June 15, Sen. John Snow, D-Murphy, successfully amended the bill to give the county until June 30 to pass a resolution.

County residents have protested the property values en masse, submitting more than 3,000 informal appeals out of a total of about 11,000 property parcels. Many were shocked that values would rise in an economic downturn. However, sale prices have remained high in Swain County, though the number of sales has dropped off.

“A lot of people’s taxes were going to have to go up, and like I’ve said before, it’s never a good idea to increase taxes,” said Commissioner Steve Moon.

Though commissioners proposed lowering the tax rate to 31.7 cents per $100, they ideally hoped to be able to drop the revaluation altogether and conduct another one in four years, when the economy has bounced back.

“It’s bad economic times, and every household is suffering,” said Commissioner Chairman Glenn Jones. “It’s just not a good time right now to raise taxes.”

There’s one downside to scrapping the revaluation — the county spent $240,000 to conduct it and can’t get its money back. However, there’s little the county could have done, because state law at the time required it to conduct a property revaluation.

“When we spent it, we thought that was a necessity. It was required at the time,” said Moon.

In the end, commissioners believe they’ll just have to cut their losses and sacrifice the cost the revaluation for the greater good of county residents.

“If we can do away with it to the benefit of the majority of the people, we need to do away with it,” Moon said.

Commissioner David Monteith agreed.

“I sure do support throwing out the new one and going back to the old (values),” Monteith said. “It’s just too hard on people. Even though the county’s going to lose money, I still support doing away with it.”

The burst of the nation’s housing bubble has caused real estate markets to tank — everywhere, it seems, but in Swain County. Property values there have increased 30 percent over the past four years, according to the county’s latest property tax revaluation. The increase prompted a stir of disbelief among local residents.

“I do not see how the property values for our homes would jump this much in this economy,” said resident Brenda Denargo to Swain County commissioners at a meeting in April where scores of residents turned out to protest the revaluation.

Though most residents saw a moderate increase in value, some, like Carolyn Shook, saw theirs almost double and expressed concern over the potential of higher property taxes as a result. Currently, Swain’s tax rate is at 33 cents per every $100 of property value.

“These tax rates are just too high for someone drawing Social Security,” Shook said.

Swain County residents have protested the property values in mass, submitting more than 3,000 informal appeals out of a total of about 11,000 properties, said county tax assessor Pam Hyde.

“That’s a lot,” Hyde said. “About 10 percent is normal.”

The 30 percent average increase in Swain County property values is much easier to stomach than the new property values handed down during the county’s 2005 revaluation, the first in eight years. Then, values increased more than 140 percent. The sticker shock was so bad that the county switched over to a four-year revaluation cycle. But with the economy much worse this time around, and residents are struggling to understand why their property values don’t reflect that.

“The economy is bad, and a lot of people are tying that to this revaluation, saying it should be bad,” said County Manager Kevin King.

The reason

But despite the economy and a decline in overall real estate sales, Swain County and the rest of Western North Carolina have stayed largely immune to plummeting property values that have hit other regions of the country.

“The sales have slowed down from the appraiser point of view, but the ones that are selling, the sale price is high,” said King.

The number of sales has indeed slowed drastically, said Lynn Shore, and independent appraiser who helped conduct Swain County’s revaluation and former appraiser for Cherokee County.

While sales have decreased significantly, property values simply haven’t, said Tracy Madgeburg, an independent appraiser who works in Haywood and Jackson counties.

“Our market has held stable,” Madgeburg said. “It has not had drastic decreases in prices by any means, though things are staying on the market a lot longer, and in the past six months, there haven’t been many buyers.”

The lack of sales has made it harder, though not impossible, for appraisers to do their jobs. Property values are based primarily on comparable sales: appraisers scout out a similar house in a nearby location that has recently sold and use that to estimate the price of another home.

“Sometimes we need to go search all of the county for comparables,” Madgeburg said. “If you’re working on a sale of a very unique property, especially a high-end property, it’s necessary.”

If the property is in a downtown area, said Shore, and there aren’t any comparable sales, appraisers may even trek to the next town over to find a similar property that’s recently been sold.

Madgeburg said many lenders want appraisers to use comparable sales from the last three months, but that can be impossible in a seasonally driven market like the mountains. If nothing can be found, appraisers will sometimes go back as much as a year to compare sales.

Appraisers use complicated formulas to determine property values, and strict guidelines govern both independent and county appraisals.

“What the public thinks is this is something the county conjures up,” Shore said. “When this is a mathematical, uniform agenda that the state has.”

Hyde has the authority to adjust property values during the appeal process if she thinks the value is in fact too high. But she can only do so much, and many walk away unsatisfied.

“If they feel like theirs is outrageously out of line, I can adjust it up and down, but I can’t go as low as they want,” Hyde says. “That’s what all the appeals say, ‘The economy’s gone busted and we need taxes down,’ which I understand. I don’t have a problem with that, but I also have a guideline.”

Ray of hope

The property revaluation leaves the board of county commissioners in a bit of a sticky situation. Commissioners know that realistically, many residents wouldn’t be able to pay their property taxes if the tax rate stayed the same while values go up.

“In this economy, you can’t go up on people’s taxes,” said King.

In 2005, after the last revaluation, the county dropped its property tax rate from 55 to 33 cents per hundred dollars to offset the increase people would otherwise see on their tax bills. The county generated only a small increase to the county’s budget.

County commissioners don’t yet know how much they will lower the tax rate by. The process will be a challenge. State budget cuts have already affected the county, and with the prospect of additional cuts to come, property taxes can be a valuable tool for making up lost revenue. The county is already looking at a deficit in its fund balance, furloughs and layoffs, said King. The county also won’t want to lower taxes until all pending appeals are resolved.

A solution to the county’s dilemma could lie in the state legislature in House Bill 1530. Four years ago, Swain County switched from an eight-year to a four-year revaluation schedule to avoid the sticker shock that accompanied soaring property values in the mountains over a longer time frame. The House bill would allow counties to scrap the results of their property revaluation and in Swain’s case, conduct another one in four years.

But with Swain’s property tax rate far below the state average of 58.6 cents on the dollar, the county may not garner much pity from state officials, King said.

“In Raleigh if you’re less than the state average, they say don’t come talk to us,” King said. “But if we went to 58.6 cents (on the hundred dollar) I don’t think you’d get another board of commissioners to run for office.”

Swain County may have low property taxes, but it’s also in a unique situation due to the number of second homes inflating the market price for property.

“What (the state) doesn’t realize is that we’re caught in between a rock and a hard place because the local people aren’t the second homeowners that have driven the prices up,” King said. “We’re a county of have and have nots.”

The county has been hard at work lobbying representatives and the bill sponsors for support. The bill must reach the Senate by Thursday of this week, or it won’t pass.

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