Swain property owners will soon find out where they fall on real estate roller coaster
Just after the New Year, property owners in Swain County will find out just how well — or how poorly — their property weathered the real estate downturn.
Swain County is wrapping up a countywide property revaluation, where every home, lot, business and tract of land is appraised with an up-to-date real estate value. Property values in turn dictate how much someone pays in property taxes.
The county hired the Raleigh-based Assessment Solutions to conduct the revaluation. The company is close to completing the revaluation and will send out letters to property owners in mid-January with their new property values.
The new property values will take effect in 2013.
In total — if you add up all the property in Swain County — values have gone down since 2005, the year of the last revaluation, according to by Tim Cain, president of Assessment Solutions. Cain did a presentation for Swain County commissioners at their meeting last week.
But there’s obviously a spectrum, with some property going up in value, some holding steady and some declining.
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What Cain considers an “average house” in Swain County falls in the holding-steady category. Cain’s definition of an average house in Swain County is 1,600-square-feet, three bedrooms, two bathrooms and one story.
Cain used the “average home” as a benchmark, or central starting point, for their reassessment of property values.
“That is the approach that we take. I think that is the right way to go,” Cain said, adding that everything has a central tendency.
But this is the mountains, a land of million-dollar vacation homes and single-wide trailer parks. Each property has unique factors: is it on Lake Fontana, is it beside a creek waterfall, are the roads paved or gravel? The real kicker: How good is the view?
“View is everything,” Cain said. “The properties that are in the view shed are selling faster than others. If you are at the mountaintop, you are at a premium. If you are at the valley by the creek, you are at a premium.”
County commissioners took time during the meeting last week to ask Cain about hypothetical homes and even their own homes, trying to get a better idea of what type of property saw increases versus decreases.
“These are the questions we are going to have to answer,” said Commissioner David Monteith, after asking about his and fellow commissioner Donnie Dixon’s homes.
It was difficult for Cain to generalize. One notable trend, however, was that high-dollar mountain properties have fallen in from their inflated real estate heyday values.
Swain County has nearly 7.5 years worth of housing inventory, meaning it would take more than seven years to sell all the houses currently on the market.
“There are so few sales out there,” Cain said.
Haywood County enacted a revaluation last year. Jackson has one coming down the pike for 2016 and Macon County for 2015.
What property values mean for property taxes
Swain County’s current property tax rate is 33 cents per $100 of property value. But, that tax rate could go up following this year’s revaluation.
If property values as a whole go down, the county would have to increase the tax rate to bring in the same amount of money.
Increasing the tax rate is never popular, but lower property values would off-set the impact of a higher tax rate. Budget-wise, the county would remain so-called “revenue neutral.”
“I think that is what the board will shoot for,” said County Manager Kevin King. “I know they want to remain neutral, but it depends on expenses.”
A low fund balance may force their hand to raise the tax rate beyond the revenue neutral level (see related article). This year, the county brought in about $4.2 million in property tax revenue.
Swain County actually conducted a revaluation four years ago but tossed it out for being inaccurate. That revaluation had been based on real estate values at the height of the housing market boom.
But when the market crashed, commissioners felt it wasn’t fair to enact a revaluation based on inflated values that were no longer applicable.
