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.
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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 necessarily 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.
“The local economy has rebounded quickly from where we were in 2011,” Kinrade said. “I did not expect that.”
The return of most home and commercial values to pre-recession levels is “the biggest economic story” since then because home sales affect so much, said Stacey Anfindsen, market analyst and residential real estate appraiser for Birch Appraisal. Some area homes lost 10 to 20 percent of their value during the recession, he 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, Wendell 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.
Garner Finance Director Emily Lucas said the impact of the revaluation for residential property owners there should be minimal but will vary based on location.
Commercial value increased enough to produce a 1 percent overall increase in property value in Garner. If that leads to taxes being decreased to a revenue-neutral rate, some residents could still pay more in taxes, Lucas said.
“Some of the areas where they are experiencing growth, like around White Oak shopping center, where they’re building multifamily buildings, those are areas where they may see an increase as opposed to the more established areas of town, where they may see a decrease,” she said.
Wendell was the only Wake town to see a 0 percent change in overall property value, counting its 12 percent increase on the commercial side.
Butch Kay, Wendell’s finance chief, said the lack of net change is uncommon.
“The trend is we would have to decrease our tax rate because property values have gone up,” Kay said. “But if you look at the last eight years, with the economy and the market, that’s what’s driving this. The good thing is, the market is recovering a little bit. In the next eight years, hopefully these property values will continue to rise and we’ll get back toward that trend.”
If the revaluation numbers stand by budget season, Kay said it is likely the town would maintain its current tax rate of 49 cents per 100 dollars of assessed value.
“Right now, with it being 0 (percent change), it could be looked at as being positive,” he said. “Preliminarily, there shouldn’t be any effect, which means we wouldn’t have to go up or down on taxes, which is a good thing. I’m hoping we’re able to say that. We haven’t crunched the numbers.”
The countywide 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.
“Off the top of my head, I couldn’t tell you anything that’s lower than it was back in ’07 or ’08,” Moss Withers, a broker with NAI Carolantic Realty in Raleigh, said of commercial property in downtown Raleigh.
In fact, 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.”
Staff writer Aaron Moody contributed to this report.
Check on your property
The Wake County government recently reappraised 360,000 county properties and mailed notices to property owners. To view your appraisal or learn how to file an appeal, go online to https://services.wakegov.com/taxportal/
Property owners can also learn more about the process by calling the Wake County Revenue Department at 919-856-5400.
Property value changes by municipality
The chart below shows the percentage change in property values – residential, commercial and overall – in each Wake County municipality since the county’s last revaluation in 2008.
Wake County overall
Source: Wake County Revenue Department