Pierce County home values moving toward pre-recession highs

Pierce County home values continue their long slog back from the depths of the recession.

Residential property assessments, on average, rose nearly 11 percent over the values set by the Pierce County Assessor’s Office last year.

The average value of homes as of Jan. 1 was $258,427, up $24,940 from a year earlier. That compares with the recession-era low of $192,129 in 2012. But values still have a way to go to meet 2007’s pre-recession high of $279,165.

Assessor Mike Lonergan’s office mailed more than 320,000 revaluation notices Thursday to property owners. The figures are available at co.pierce.wa.us/atr.

For homeowners, especially those who owed more on their homes than they were worth during the recession, the continuing value climb is good news. It means they might be able to sell or refinance their homes without taking a financial bath.

According to data from real estate information firm Zillow, about 13 percent of homeowners in the county had mortgages that were underwater at the first of the year. In 2012, nearly half of homeowners had negative equity in their homes.

Prices continue to climb, according to Northwest Multiple Listing Service. In May, for instance, median single-family home prices in Pierce County rose 7.8 percent to $275,000. The inventory of homes for sale is at a record low, about 30 percent below last year’s tight supply.

Tacoma real estate broker Dick Beeson said, in his experience, the assessor’s values lag the market by six months or more.

“It’s a seller’s market now,” he said. “The problem is finding another home when you sell yours. You could sell your home at a good price, but end up living in a tent.”

  

The assessor’s office’s annual re-evaluation effort revealed how the county’s towns and unincorporated areas are bouncing back.

▪ The East Pierce County cities of Wilkeson and South Prairie saw the greatest increases by percentage, 25 percent and 21 percent respectively. But the average dollar value increases weren’t at the top of the list because home prices in those communities were the lowest in the county, $149,267 in Wilkeson and $153,358 in South Prairie.

▪ The Gig Harbor Peninsula remained the highest-priced residential area in the county with an average home value of $424,967 — an increase of $42,503, also the highest in the county. The city of Gig Harbor was the county’s second highest-priced residential community with average values of $357,237.

▪ Commercial real estate value increases lagged behind residential, Lonergan said. Average commercial property values rose by 2.51 percent in 2015, according to assessor’s data.

Values were up sharply in apartments and high-rise condominium buildings, but dropped for auto dealerships, banks, regional malls and big box stores. Lonergan said the brisk market for rentals drove apartment values upward while the demise of several big box chains weakened the values for their stores.

▪ Residential sales picked up in 2015 with 11,520 properties sold compared with 9,448 in 2014 and 6,624 in 2013.

Lonergan cautioned that large increases in property value don’t necessarily translate to dramatically bigger tax bills.

“My message to taxpayers is don’t panic when you get your valuation,” Lonergan said.

In most instances, state law allows property tax collections to rise by only 1 percent yearly. In a few instances, new voter-approved levies or increases that local governments banked by not taking their full 1 percent increases in prior years could push those increases above 1 percent. Property owners will receive notice of their property taxes due in February.

The assessor’s office arrives at new values through a couple of methods. Appraisers physically re-evaluate one-sixth of the property in the county yearly, Lonergan said. Those re-evaluations are the result of homeowner interviews, drive-by inspections, building permit research and home sales price evaluations.

Homes, land and buildings not individually re-evaluated are typically readjusted using a formula based on sales and evaluation data from the county and their neighborhoods, he said.

For the notices that went out last week, the work to assess values was done last year.

The assessor’s office doesn’t always get the values right. That’s why property owners can appeal to the county Board of Equalization within 60 days of the re-evaluation notice.

This story was originally published June 26, 2016 at 5:00 PM with the headline "Pierce County home values moving toward pre-recession highs."