Average Wake home value rises 38%

In the update of property values, some owners will see a big jump in value. That might mean higher taxes

RALEIGH -- When Joseph Huberman's county property tax revaluation comes in the mail this week, he will have only himself to blame for the escalating value of his 77-year-old Boylan Heights home.

Huberman bought the house in 1978 for $24,000. As of Monday, revenue department assessors will appraise his home at $365,000 -- a 1,421 percent return on his original investment and a 65 percent jump since 2000, when Wake last had a countywide revaluation.

"We worked hard for this," said Huberman, a sculptor who has remodeled his home over the years.

Many of Huberman's neighbors will see even larger gains. On average, the value of houses in his historic neighborhood just west of downtown rose 115 percent over the past seven years -- a rate three times the county average.

This week, Wake residents will receive written notices of the increased values of their land, homes and commercial property.

The notices that will be mailed to 311,212 property owners Tuesday are not bills. Taxes paid using the new, higher values won't be assessed until fall 2008.

The increases for most homes will be in line with past reappraisal cycles in Wake County. But many homeowners are likely to suffer some sticker shock when they see how much their properties have jumped in value over the past seven years.

On average, the value of the county's real estate parcels increased by about 43 percent. The combined value of residential lots and homes went up about 38 percent, a little below the overall average.

Because the county appraises real estate using recent property sales, areas where the property market has seen the most recent activity will show the largest increases. Those include neighborhoods inside the Raleigh Beltline and in once-rural towns that have sprouted into commuter suburbs.

Urban homesteaders

When Huberman bought his first Boylan Heights house, it wouldn't have appeared on anyone's list of hot properties. Much of the neighborhood consisted of rundown rental houses, the larger ones partitioned into cheap apartments.

The rock-bottom prices attracted artists, musicians and young professionals such as Charles Meeker, a young lawyer and future mayor. These urban homesteaders worked together to buy dilapidated houses, rehabilitate them and sell them.

"Our goal was to take the worst house on the block and make it the best house on the block," Huberman said. "Over the course of about 10 years, we really turned the neighborhood around."

He stopped selling in 1988 because sale prices were climbing. He feared people like him would be priced out and Boylan Heights would lose the diversity that first attracted him to the eclectic neighborhood.

Now he keeps three homes as rental properties. Some of his tenants have gone on to buy homes in the neighborhood.

"I'm really pleased that the area is improving," Huberman said. "And I know that's part of the cost of living in a nicer area. The values go up. Now we're reaping both the advantages and disadvantages."

Average tax bill rises

Property owners won't be able to calculate exactly what they will pay in 2008 taxes until the county commissioners set the tax rate for the next fiscal year, which starts July 1.

Wake's current rate, 67.4 cents for each $100 of assessed property value, is almost sure to decline with the reappraisal.

State law requires local governments to make public what tax rate would be required to raise the same amount of money from property taxes after a revaluation as the year before. Wake predicts this "revenue-neutral" tax rate for 2008 will be 53 cents per $100 of assessed value.