Most Wake County residential property owners are unlikely to experience sticker shock when they open property revaluation notices in the coming days.
Results from the county’s recent reappraisal of all 360,000 properties in the county show most homes have regained the value they lost during the recession but haven’t appreciated enough to trigger fears of tax increases.
Residential property values haven’t changed in Wake on average since 2008, according to the county, while commercial properties rose 19 percent on average.
The results are a dramatic change from 2008, the last time the county performed a reassessment. Residential property values increased 38 percent that year as the reassessment captured eight years of a real estate boom just before the housing market crashed, and commercial properties increased 49 percent.
Overall this time, Wake property values increased only 5 percent after rising at least 40 percent in each of the last three reassessments.
On Monday, Wake staff presented its findings to the county Board of Commissioners and began mailing updated appraisals to property owners. Tax bills – which are calculated by multiplying the tax rate by the property assessment – are likely to change to reflect the new property values but not until the Wake Board of Commissioners votes to adopt the new appraisals next summer.
While a property’s tax value does not necessary correspond to what it would fetch if put up for sale, the valuations do provide a snapshot of how the real estate recovery has been playing out in different parts of the county.
Though real estate appreciation has slowed compared with previous eight-year reassessment windows, property owners should be encouraged, said Marcus Kinrade, Wake’s revenue director.
The recession, which started in 2008, was devastating to home values countywide and countrywide. As recently as 2011, many Wake homes were selling for 10 percent less than their assessed value, Kinrade said.
“So many aspects of our economy are tied to housing,” Anfindsen said. “It affects people’s moods, it affects their spending.”
The county reviewed land and structures on each property to determine values. It considered the number of bedrooms, bathrooms and other structural features when appraising single-family homes. County staff appraised 100,000 of them in person, Kinrade said.
Property owners can appeal their appraisals between Jan. 1 and the day the Board of Equalization and Review adjourns, usually in early April.
About 8 percent of residents appealed the county’s appraisal after the 2008 revaluation, Kinrade said. He expects the percentage to be far lower this time around.
Homeowners in some of the most desirable areas of the county – inside the Beltline and in Western Wake – have recovered the quickest and are most likely to see increases in their property values, as are homes valued at $400,000 or less – regardless of location.
Apex, Cary, Morrisville and Holly Springs are the only towns where the majority of properties saw their values rise, Kinrade said. Apex and Cary properties increased an average of 7 percent and 4 percent, respectively.
Home prices in downtown Raleigh are up an average of 26 percent from when they were most recently purchased, according to MLS heat maps Anfindsen provided. They’re up an average of 17 percent in the 27608 ZIP code inside the Beltline north of downtown.
Values remained stagnant in Fuquay-Varina and other parts of Raleigh, while they fell between 2 and 6 percent in Eastern Wake towns such as Garner, Knightdale and Zebulon. They also fell 5 percent in Wake Forest, where new construction is keeping resale prices low, Anfindsen said.
But home values in Wake’s poorer, rural areas have always trailed those in its urban and Western Wake communities, he said. He expects almost all residential properties to return to pre-recession levels in the next couple of years.
Meanwhile, Wake’s commercial stock is valued 19 percent higher than it was eight years ago thanks in large part to an increase in apartment prices and downtown land sales.
Apartment values are up an average of 54 percent. PNC Arena increased 38 percent to $310 million from $225 million. Hotel values are up an average of 22 percent, and downtown Raleigh’s combined land and building value increased 31 percent.
Properties in the Hillsborough Street tax district increased 69 percent.
Withers said commercial property has gotten so expensive that developers interested in building more apartments downtown will need to raise rates higher than the $1.50 per square foot market average to make transactions worthwhile.
“Until those who want to rent in urban areas are willing to pay more, the price (of land) is maxed out,” he said. “The risk is being pushed to the buyer.”
BY PAUL A. SPECHT