So, My Home Is Worth How Much?

King County’s taking unusual measures to assess homes in an unusual market.

Over the next several months, homeowners will be receiving their annual property value assessments from King County, and they're likely to be both pissed and pleased by what they see. Pissed, because their property values, as judged by the county, have plummeted by some $70,000 for the average-priced home. "We're running about a 15 or 16 percent decline over last year so far," says Acting King County Assessor Rich Medved, whose office has sent out approximately 130,000 notices and has another half-million or so to go. Pleased, because that means homeowners will pay lower taxes.As Medved notes, "The entire industry is facing a set of market conditions like we've never seen." But last year, already deep into the recession, assessments continued to go up—sparking numerous complaints and a record number of appeals from homeowners, who bolstered their cases by pointing out what piles of junk their homes really were (see "Rip This House," SW, October 8, 2008). This year, however, Medved says his office felt compelled to change its approach.Normally, the Assessor's office bases its values on a three-year average of sale prices. "In a rapidly rising real estate market, that helps flatten [assessments] out," Medved explains. A three-year average at this point, though, would yield overvalued homes, according to Medved—so his office used a two-year average instead. "We would have liked to have gone to a one-year [approach], but there weren't enough sales" in the past year, he adds.HIs office also broke with tradition by factoring in the influence of foreclosures and "short sales," whereby distressed homeowners sell their properties for less than they owe. Standard practice in the industry held that both types of transactions should be ignored, due to fire-sale prices that don't reflect true market values. This year, Medved says, there were too many to ignore—about 15 percent of total sales in the county. Medved's office chose to take the two-year average of normal sales and adjust them downward by 15 percent to account for this distressed part of the market.This new approach—and the corresponding lower taxes—might well help Medved in his bid to keep his job come November. Medved, the former chief deputy Assessor, was appointed to the number-one spot last month when longtime Assessor Scott Noble stepped down as he was sentenced to eight months in jail for vehicular assault. Medved now faces an election against Port Commissioner Lloyd Hara, his only opponent so far.

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