It’s getting hot out there and I’m not talking about the weather. A brief pause for mid-May snow aside, things have really been heating up in the local real estate market this spring. How hot? Well, if you have a home to sell this summer in Paonia proper, it will certainly be “a seller’s market.” After having found something of a market equilibrium last year, there was a tipping-point this spring that changed the dynamic – when buyers recognized that prices are rising, the pickings are slim, interest rates have gone up, and the affordability door is closing. It feels a lot like 2007 out there. It’s not uncommon for a new listing to be scheduled for a showing more than once the first day it’s on the market or for people who live out of the area to make an offer without having stepped foot inside. Given that there’s no new construction to help boost the supply side of the equation, while demand is increasing, further price escalation appears inevitable. That’s good news, right? Obviously not if you’re hoping to purchase a home or are one of those who have no intention of selling but recently received a nice little surprise from the county assessor and will be seeing their tax bill rise.
As I opened mine that day I knew it wouldn’t be long before the phone would ring with a call from a client or friend exclaiming, ”Holy smokes, wanna guess how much my assessed value just went up?” Sure enough, later that day someone whom had just paid $108,000 in January for a building lot received a valuation notice of $171,000! What? Personally, mine didn’t jump very much and clearly it’s the folks who saw the biggest increases that are going to howl the loudest, so I called the county assessor, Debbie Griffith, to get her perspective on the situation. She was careful to say that she avoids quoting percentages but was glad to offer some gross figures and general observations.
Using 529 home sales from 2015 and the first half of 2016 as their basis for comparison, sales were substantially higher than the 358 used in the prior (2013-14) period. Vacant land sales rose from 46 to 106. “Homes around Cedaredge were way up,” she said. However, the aggregate market valuation and gross assessed value each only rose about 5%. That, coupled with the required “Gallagher Amendment” rate adjustment from 7.96% to 7.2% for residential property means that the county won’t see the kind of increased tax revenue that one might think comes with reassessment. Ms. Griffith was quite forthright with offering to re-evaluate their valuation with citizens who feel wronged. The first step is to verify their department has accurate information about the physical attributes of the home, bedrooms, baths, construction, etc… then the more subjective elements of valuation. One good measure of whether or not the assessment is fair comes from answering the question, “Would you sell it for the amount the county says it’s worth?” If the answer is no, regardless of the increase, you’re wise to just let it pass by. And, if you’re thinking, “There’s no way my house is worth that much!” you may be right, but perhaps not for long.