Pierce County home values plummet

The value of the average home in Pierce County plunged nearly 12 percent this year, marking the fifth consecutive year home assessments have dropped.

And this year’s decline was the largest based on percentage since the long slide began, according to figures from the Pierce County Assessor-Treasurer’s Office. By comparison, residential values went down more than 7 percent in 2011 and more than 10 percent in 2010.

Since 2008, the average value of a residential property in Pierce County has plummeted a total of more than 31 percent – from $277,674 in 2008 to $191,402 as of January, the county reported.

“The 2012 values reflect the continued weakness of the real estate market and an accelerating decline across the board for all residential property types,” the assessor-treasurer’s office reported in a news release last week.

The latest assessment notices contain the assessor’s valuations as of Jan. 1, 2012. They’re based on sales that occurred in 2011.

Notices for most residential and commercial properties will start going in the mail Friday. Those values will be used to calculate property taxes for 2013.

The office of Assessor-Treasurer Dale Washam said 95 percent of the notices will show a reduction in value from 2011.

How much the assessed value of your house has dropped cumulatively in the past five years depends on where you live.

The areas of DuPont, Steilacoom and Chambers Bay saw the lowest drop at less than 25 percent since 2008. Values for the east end of Tacoma alongside Pacific Avenue have fallen by more than 38 percent in the same period.

Commercial property owners haven’t fared quite as poorly. Average commercial values fell by 3.97 percent compared with last year. Since 2009, the average value for a commercial property in Pierce County has dropped by $233,500, a loss of nearly 20 percent.

The other thing that’s changed during the slide is the method of estimating how much your property will sell for.

Before the market started dropping, a home’s fair-market value was usually 10 percent to 20 percent more than the assessed value, said Mike Larson, president of Allen Realtors in Lakewood. That’s no longer the case.

“Very generally speaking, the assessed values are more in line with fair-market value than they’ve ever been,” said Larson, past president of the Tacoma-Pierce County Association of Realtors.

“When values decline, it’s not good,” Larson said, causing potential buyers to pull back. But he noted the latest assessments date back to January and market conditions have improved since then.

Median home prices in Pierce County were essentially flat comparing May 2011 to last month, according to Northwest Multiple Listing Service data. Prices fell 1.03 percent from $194,000 to $192,000, the combined single-family residence and condominium data show.

That’s a significant improvement from earlier this year when median prices frequently plunged by double-digit margins.

In the year-over-year February period, for example, Pierce County median home prices fell more than 16 percent to $169,450.

Whether this year’s drop will lower how much you pay in taxes depends on how many taxing districts can lay claim to your money, what your share of voter-approved bonds and levies is, and whether those rates increase.

You won’t know your tax bill for 2013 until the assessor’s office sends it to you early next year.

Assessed values are one piece Pierce County uses to estimate revenue for building a balanced budget for 2013, said budget and finance director Gary Robinson.

“The decline in property values is going to continue to put constraints on county revenue sources,” Robinson said. “It’s disappointing the declines continue because it’s an indication of a very slow economy.”

But it’s too soon to say whether budget cuts will be required for next year, he said. The county won’t have a complete picture of revenues until early September. By then, it will have reports for property tax from new construction and updates on sales tax and real estate excise tax revenue, Robinson said.

As required by state law, Pierce County appraises all properties on a six-year revaluation schedule. One-sixth of the county is physically inspected every year, while the values for the remaining five-sixths are “statistically trended, based on market indicators,” Washam’s office said.

Through the first five years of the six-year revaluation schedule, Washam’s office has physically inspected 259,665 properties, slightly more than 80 percent of the total number of properties in the county, according to Washam’s office.

Washam, who was elected in 2008 to a four-year term, has considered all the county’s property tax rolls “tainted” until assessors have looked at every parcel.

An independent consultant found that the assessor’s office under Washam’s predecessor, Ken Madsen, failed to perform many physical inspections from 2001-08. An audit concluded in 2009 that there was no evidence taxpayers were harmed.

An email from Washam’s office said physical inspections done during his administration have resulted in a property inventory that “is substantially more accurate.”

The email said one factor contributing to this year’s drop in values is the addition of some foreclosure sales in calculating assessments. Washam’s office requested that change and the state Department of Revenue gave counties that latitude in November.

“Including them allowed for more accurate and honest assessments,” Washam’s office said.

Value trends by area