Monday, December 31, 2012

The Assessor does his thing

A 0% increase for Madison Park properties

Most Madison Park homeowners were probably shocked to receive their “Official Property Value Notice” from the King County Assessor late this summer and discover that their property’s assessed value had not changed by even one cent year over year. The Assessor’s staff concluded that Assessment Area 14 (which in addition to Madison Park, includes Madrona and Leschi) had experienced no appreciation in housing values for the period ending January 2012, the relevant end point for purposes of the 2012 valuation process.

Even though this doesn’t mean that taxes will stay static next year for Madison Park residents, the 0% change in the “Standard Area Adjustment” for our part of town is in some respects good news. It’s an official confirmation that, at least in the opinion of the Assessor, the downward trend in property values here has been staunched.  The last time the Assessor determined that property values were not declining in Madison Park was in 2008.  Zero percent looks pretty good in comparison to what we’ve been experiencing:

Our examination of the Area Reports for the various Seattle neighborhoods shows that our area is almost unique this year among communities “south of the ship canal.”  While many Seattle neighborhoods to the north also rose to the level of zero growth in values, we could detect only one other area to the south that met that very low standard: the Central District. Some areas actually showed significant declines (Georgetown was down 9.79%, while Beacon Hill was down 11.15% and Rainier Valley was down 11.85%).

Meanwhile, only a few assessment areas in North Seattle showed significant declines (Lake City was one exception), while no fewer than seven (Green Lake, Ravenna, Wallingford, Blue Ridge/Shilshole, Maple Leaf, Fremont/Phinney Ridge, and West Ballard) had no decline.

In any given year, only a few assessment areas in the County are subject to an actual physical inspection of all residential properties by the Assessor’s staff.  This more comprehensive and intensive analysis must occur in each area every six years. Madison Park and the other neighborhoods in Area 14 last went through this rigorous process in 2010. In non-inspection years, the Assessor’s staff looks at actual sales of properties within the subject area and determines a median increase or decrease (the “Standard Area Adjustment”) which the Assessor then applies to all residential properties in the area that have not had improvements or other changes since the last assessment period.  

Assessment Area 14, including Madrona and Leschi

Interestingly, our immediate neighbor across the ship canal, Laurelhurst, went through a physical inspection this year that resulted in an upward assessment of 6% on average for those “lucky” homeowners. It’s somewhat of a mixed blessing to have confirmation that property values in your area are on the rise when your tax bill is then ratcheted up as a result.

And speaking of taxes, this is the point where we remind readers that the Assessor simply sets the property values and does not determine tax rates.  Approximately half of what we pay in property taxes is the result of decisions made by government officials.  The other half is the direct result of citizen votes, such as on school levies. The amount we pay in property taxes takes into account what the government needs to raise in order to fund public services and what the total value is of taxable property. The annual tax rate is determined after both of these factors have been determined.

The 2013 property tax bills will be mailed on February 14. Our zero percent change in property values for 2012 will certainly ensure that the average absolute tax levels in Madison Park show a lower rate of increase next year than that of, say, Laurelhurst.  But it probably won’t mean no tax increase. The number crunchers are still figuring what the new rate for Seattle will be.  We should know what that number is in January.

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