Assessed home values in Pierce County jumped nearly 10 percent this year, marking the second straight year they have risen with an improved economy and real estate market.
But average home values still have a long way to go to regain their 31 percent drop from 2007 to 2012 caused by the economic recession.
“We’re still nowhere near the peak values going back to around 2007,” said Assessor-Treasurer Mike Lonergan. “But we’re on our way back up.”
Countywide, home values increased 9.6 percent on average this year, more than triple the percentage they rose last year.
Notices for residential and commercial properties will go in the mail Friday. The notices contain the assessor’s valuations as of Jan. 1, 2014. They’re based on sales that occurred in 2013.
Those values will be used to calculate property taxes in 2015. You won’t know your tax bill until the assessor’s office sends it out in February.
Despite the rise in assessed home values, Lonergan said most homeowners will likely see their tax bills increase only slightly. That rise is due to the annual 1 percent increase in property tax that county, city and most other local taxing districts are allowed to collect under state law.
Areas where voters approved added tax levies or bond issues could see a greater tax increase.
Voters in the Tacoma School District approved general operations and technology levies in February. But the district plans to keep its total tax rate at about $7.69 per $1,000 of assessed value by structuring its debt, said Rosalind Medina, chief financial officer.
Where the gains are
This year, all areas of Pierce County saw values go up, with outlying areas showing some of the strongest gains percentage-wise.
Cities and towns with some of the biggest double-digit gains were South Prairie, Orting and Fife.
Tacoma, Lakewood, Puyallup and Gig Harbor saw smaller gains. Key Peninsula lagged behind but still showed a slight gain.
Assessed values increased for about 85 percent of residential and commercial properties.
“There’s better credit availability and a slow return of the economy in general,” Lonergan said. “Buyer confidence is increasing.”
The average value of a residential property in Pierce County increased from a revised average of $198,020 last year to $217,023 this year. Home values had increased 3 percent from 2012 to 2013.
But the average home value for 2014 is still 22 percent less than the peak of $279,165 in 2007.
The rising values could be good news for those who owe more than the value of their home and are “under water” with their mortgage, Lonergan said.
“This is going to move a lot of people (and) get their head above water,” he said.
The higher assessments also will provide more money for fire districts and the county library system, whose budgets have been hurt because of the sharp drop in property values, Lonergan said.
Some parks districts, the county’s flood-control zone district and some other taxing districts also could receive more money, Lonergan said.
Meanwhile, values for commercial properties lagged, increasing by only one-half of 1 percent, Lonergan said. They jumped by 3.3 percent last year.
Commercial values show a mixed bag with restaurant values down on average and office space up slightly.
“Different parts of the market are healthy and some are really sluggish,” Lonergan said.
Clearing the market
The 9.6 percent increase in assessed home values makes sense and is reasonable, said Mike Larson, president of Allen Realtors in Lakewood.
“We’ve gotten a lot of the distressed properties off the market,” Larson said. Confidence in the economy has increased, while interest rates remain low.
Assessed value is a good gauge, but it’s still less than fair market value, Larson said.
The median sales price for homes and condos in Pierce County increased 9.05 percent in May to $229,000, compared with $210,000 at the same time a year ago, according to the Northwest Multiple Listing Service.
At the median sale price, half the homes sold for more than that amount, and half sold for less.
Buyers and sellers rely on private appraisals rather than assessed values to determine the value of a home. The appraised value is the more relevant figure because it’s usually a more recent picture of the market.
Value lower than 2008
In 2008, the total value of all assessed properties in Pierce County was $92 billion. That total for 2014 is $73 billion, up from $70.5 billion last year.
Rising assessed values are “a continued positive sign for the economy within our region,” said county budget and finance director Gary Robinson.
They show the county and region are moving out of the recession, he said.
As required by state law, Pierce County inspects all properties on a six-year cycle. One-sixth are physically inspected each year.
This year, the Assessor-Treasurer’s office is inspecting properties on the Gig Harbor and Key Peninsulas.
The remaining five-sixths are “statistically trended” based on sales.
Property owners can appeal their assessment by filling out a petition by Aug. 26 with the county’s Board of Equalization, which reviews assessed values.