Values down 5.9% on average
That old adage about the certainty of death and taxes has a corollary for property owners: the inevitability of tax assessments, which for those of us in King County is an annual ritual. Last year, as you may recall, our area of town (known to the King County Assessor as Area 14) was subjected to a physical inspection by the Assessor’s staff, a process that resulted in changes to the valuation of area properties that were definitely not uniform. Overall, however, the decline in assessed values for properties in Area 14 (Madison Park, Madrona and Leschi) was 1.3%. Last year was the second year in a row that the assessments had been adjusted downward. This is the third year.
Everyone should have long ago received their 2011 property assessments for taxes to be billed in 2012 (they were mailed out in August); and assuming that no improvements were made to your property over the past year, the “official property value notice” should show your property declining in value by about 5% (5.08% to be exact). This “standard area adjustment” applies to 97% of the homes in our area. The exception this year is for waterfront properties, which were uniformly decreased in value by 12.19%. Such a large adjustment in the assessment of these 100 very expensive waterfront homes had an outsized impact on the average decline for the 3393 total properties in Madison Park, Madrona and Leschi combined. As a result, the neighborhoods registered a 5.9% average decline in property value year over year:
2010 Average Value: $1,136,300
2011 Average Value: $1,069,400
The average land value, according to the Assessor, is now $631,200 and the average value of the improvements is $438,200. The valuations were based on sales occurring in Area 14 during the period from January 1, 2008 through January 1, 2011, giving progressively higher weighted value to most-recent sales.
|Area 14, showing the various subunits|
A decline in the tax-assessed value might be considered a good thing if it automatically meant a decrease in taxes. Unfortunately, as we’ve noted many times, assessing the tax value of properties and setting the annual tax rate are two separate and distinct processes. The government’s need for revenues in 2012, as determined by the votes of our elected officials and the passage of tax levies by the voters, will not be known for certain until early next year. Once that aggregate tax-revenue number is established, the tax rate will be determined based on the total assessed value of all the properties to be taxed.
Even though our neighborhoods’ assessed values declined by 1.3% last year, the annual tax rate rose by almost 7%. So for 2011, the impact of an average decline in property values was more than offset by an increase in the overall tax obligation, meaning higher taxes. That will probably happen to us again in the coming year due to the fact that Seattle voters just passed a $232 million school levy that almost doubles the existing school levy amount.
There’s something of a silver lining, however. By our count, of 27 Assessment Areas located in Seattle, only nine of them suffered a larger decline than Madison Park/Madrona/Leschi. The Georgetown/South Park area showed the biggest decrease (down 7.37%), while three areas actually showed increased values: Green Lake (up .78%), Phinney Ridge/Fremont (up 1.47%) and Wallingford (up 2.52%). While property owners in those last three neighborhoods have the satisfaction of enjoying escalating property values (at least in the opinion of the government), the positive glow from that accomplishment may be offset by the greater likelihood of their having to pay higher taxes next year. Those of us living in Madison Park (or, certainly, Georgetown) will be paying a diminishing portion of the total tax obligation relative to most of the other Seattle neighborhoods. That’s the good news portion of what is otherwise a bad news “2011 Residential Revalue” report by the Assessor.
Here’s how the tax revaluations have played out for Area 14 over the past seven years (based on the standard area adjustment, except for 2010, where the average adjustment for all properties is used):
So, as you can see, the Assessor believes that over the last three years the market has just about wiped out all of the increased property value that accrued to our part of town during the previous three. Of course, if you don’t believe that the Assessor can accurately use property sales data to track changes in values for properties that didn’t change hands (like most of ours), you may ignore all of these statistics as meaningless bureaucratic static. Just so long as you pay your tax bill, that is. You’ll know exactly what that is come February.