Pierce County announcement.
The latest assessed values for residential and commercial properties throughout Pierce County are in the mail to taxpayers and posted on the Assessor-Treasurer’s website.
“Home values in all parts of our County continue to increase dramatically, typically by a startling countywide average of around $80,000 each in the past year,” said Mike Lonergan, Pierce County Assessor-Treasurer. Overall, residential properties went up over 19 percent this year, compared to 16 percent in 2021, due to a continued hot real estate market.
Lonergan cautioned homeowners not to jump to the conclusion that a large increase in value will result in a large tax increase, because state law limits the amount taxes can go up without a vote of the people. “It’s a math equation,” he said,” and when values are rising, the legal limits on each taxing district will reduce their tax rates per thousand dollars of value.”
“Your property tax in 2023 will be the new 2022 value multiplied by the combined tax rates of your school district, city, fire district and so forth, added to the statewide school levy that everyone pays,” Lonergan explained. “So a lot depends on public votes in your local districts, such as levy lid lifts and bond issues.”
While home values are all up sharply, the change varies in different communities, based on actual sales of similar properties. “The 18.4 percent increase in Tacoma was near the County average, bringing the typical Tacoma residence to $493,000, an increase of $77,000,” Lonergan explained. “By contrast Edgewood’s increase was the lowest at 12.9 percent, or $69,000, for an average 2022 residential value of $604,000.”
As COVID-19 restrictions eased, most commercial properties showed slight value increases, with the exception of hotels which remained unchanged. Retail, restaurants and office space each went up around five percent, while apartment buildings and warehouses both showed another year of double-digit increases, due to continuing demand for affordable housing and online ordering/distribution.
Any property owner who believes the Assessor-Treasurer has over-valued their property may appeal to the Pierce County Board of Equalization at no cost. The appeal must be filed no later than August 23, 2022, providing evidence that comparable properties have sold recently at a lower amount. More information is available at www.piercecountywa.gov/atr.
Be prepared for the inevitable crash in real estate values: remember 2008? Different reasons in overheated markets: subprime lending vs. rapid interest rate hikes from historically low rates. It’s already happening. Spring and summer historically should have significant rise in values for the year but those values are stagnant or falling. Just wait until winter 2022/2023 when real estate markets typically fall. Things are going to get worse; perhaps a lot worse. Coupled with a market pull back will be a significant increase in rents which started as soon as COVID landlord restrictions were removed in late 2022: rent increases paused for almost 3 years and pent up demand as landlords sell at the top of the market and escape government fiddling while erstwhile buyers become renters rather than risk a down market. Been there, done that for over 40 years.
High value is only important to people who are selling their home. We have lived in our home for 42 years with no plans to sell anytime soon, so the perceived value is not important to me. What is important is when the taxes start making it difficult for us to stay in the home we have worked so hard for in order to have a comfortable home in our old age.
Yet you make the case that increased property values do have an impact even on long term owners in the form of higher property taxes that literally price you out of your own home! Inflated housing prices affects everyone……but in different ways.
Buyers also face the prospect of buying a home at inflated prices which leaves them vulnerable in the following down market that inevitably follows boom years. That downturn (up to 50% in 2008-2014) can erase not only their down payment and any equity but leave them “upside down” owing more on their mortgage than the property is worth. This was very common after the housing bust in 2008. It took years for this inventory to be sold in “short sales” often converting mortgage debt into personal debt which ruined owner credit.
Yes sellers can make a “killing” if they sell at the top of the market but what are they going to buy as a replacement house? Another over priced property? Or perhaps take their profits and move to a different lower priced locale…….and drive up prices there! We’ve seen that here with cash rich Californians moving here.
Rising and falling markets affect everyone.