Property revaluations don’t necessarily reflect market values

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A realistic view of the property tax revaluations from a realtor’s perspective

As many of you know, a revaluation of real property values is being done by appraisers on behalf of our city and county tax revenue departments. As expected, it has shown that property values have indeed fallen.

Homeowners have been expressing anguish to their realtors about the predicted drop in home values in January 2017, when the octennial revaluations will be implemented, and suddenly, home values could be significantly less.

The Rocky Mount Area Association of Realtors would like to give the public another perspective on this matter, in order to help relieve some of their apprehension.

It is true that property prices have, in general, fallen. However, this is not something that has just happened.

Rocky Mount reflects what has taken place in many areas across our country since 2008. Realtors have had the unfortunate task of imparting the news to clients that values have declined.

Anyone who has sold a home during the last few years has probably seen that the market value of their property has not, in general, favorably aligned with the current tax value. That is because tax values are not market values. Tax values are established by appraisers on behalf of our tax-collecting bodies for the purpose of establishing a value at which to collect property taxes.

Nash County, for example, levies a tax of 67 cents for every $100 worth of property. Our law dictates that our property values have to be reassessed at least every eight years. Market values, on the other hand, change constantly based on various factors, with supply and demand at the top of the list.

All that is currently taking place is a realignment of these two values. The new tax revaluation is not going to have any significant bearing on the market value of a person’s home. This is because when realtors price a home, it is not done by basing it on tax values, but by studying other recent sales of comparable homes in the surrounding area and making any necessary adjustments. In other words, recent sales of comparable properties in the area will determine the appropriate price range for the list price of a home, and the price that a ready, willing, and able buyer actually pays for it establishes its market value.

So, if the speculation that the current revaluation will result in lower property tax values is correct and the rate at which we are taxed stays the same, most of us will be paying lower property taxes. As this will result in a decrease in revenue for our city and counties and, while we are not here to speculate, we can probably presume that some adjustment in collecting tax revenues may have to take place. The reduction in property values will likely not have come as a big surprise to our revenue departments.

We hope that this article clears up some of the confusion. Also, we would like to add that our real estate market is very much alive! In 2013, 871 homes were sold in the Rocky Mount Area. In 2014, 874 were sold, and in 2015, 954 were sold! While it is not, perhaps, as strong as we would like for it to be, the past three years have shown encouraging improvement and things are heading in the right direction!

KAY OWEN

Realtor/Broker

Fathom Realty

Rocky Mount

Comments

Thanks for the article

I can't speak for Rocky Mount or Nash County, however Tarboro and Edgecombe County politicians haven't shown any ability to cut spending or taxes.

Lower Taxes?

I think it is pretty naïve to think that the county and the city will be collecting less taxes due to the reduction in property values.

I think it is safe to say, we will not be paying less taxes. NO DOUBT, the governing authorities will increase the tax rate to generate the funds needed to balance the budget.

While tax values are not a reflection of market values during the whole 8 year period, the revaluation is supposed to be based on market values at the time of the revaluation. That is why the values will tax values will fall.

Just a note to the Editor. The term Realtor designates a member of the National Association of Realtors and should always be capitalized and never used in conjunction with other words.

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