Ravenwood - 02/29/08 07:00 AM
If you think the decline in the housing market is going to show up on your tax bill, think again. In Fairfax County (VA), the government appears to have jacked up their assessments for land value to cover the deflation.
What stunned [Fairfax resident Cathlin Bowman] was the gaping disparity between the value of the 1951 brick-and-shingle house on Barbee Street and the land under it. The 11,500-square-foot lot, assessed at $301,000 last year, is now worth $501,000 -- an increase of 66 percent.Hoping to take advantage of the housing dip, I had been shopping for a new home in Fairfax. Now maybe I'll continue to rent.Her house, assessed at $266,590 in 2007, is now valued at $63,930 -- a decrease of 76 percent.
It seems to me that your assessor's skills are improving, and that's good.
Are there teardowns in your neighborhood? How does your current assessment's land value compare to the price of those teardowns?
Houses, like cars and machiner, depreciate -- at about 1.5% per year. (Every homeowner who spends his weekends and/or his $ maintaining his house knows this. Your assessor may not have acknowledged this in recent years. But the valuation on your house should reflect the accumulated depreciation.
I can also picture a situation in which assessors are playing catch up -- that even after the market has turned around, assessments might legitimately still rise.
As long as all the properties in town are assessed in a fair attempt to reflect the neighborhood transactions, I think your assessor is treating everyone fairly.
To your comment about renting, there is a school of thought that says that 2010 is going to be the time to plan to buy. This has nothing to do with the current mortgage crisis, but with some 18-year cycles. Google the name Fred Harrison and 2010.
And aside from that, all the predictions I've been seeing suggest that the current mortgage situation is going to lead to more declines; you're wise to rent for the time being. You'll have your buying opportunity.
Posted by: LVTfan at February 29, 2008 9:15 PMThe assessed value of my house just dropped by 5% - but since there's long been a limitation on how much the taxable value can rise per year, that and my taxes are still going up. (Michigan)
Posted by: markm at March 1, 2008 8:56 AMActually residences do not depreciate. Only commercial and investment property depereciate.
Posted by: ParatrooperJJ at March 3, 2008 9:29 AM(c) Ravenwood and Associates, 1990 - 2014
