Welcome to Skagit County
September 30th, 2005
PROPERTY VALUE CHANGE NOTICES REFLECT "HOT REAL ESTATE MARKET"
On September 30, over 40,000 "property value change notices" will be mailed out by the Skagit County Assessor's Office. Not since 1989-90, have real estate values increased as fast as they have in the past 18 months. This increase in values began 5 to 6 years ago, when interest rates began to move down and the "Tech Bubble" burst in the stock market. As interest rates fell, lower payments increased buying power 27% over 3 years. At the same time, many investors who had been burned by the stock market technology collapse, moved money into real estate investments. These events, combined with mortgages with zero down payments, ARM's and "interest only" components, have fueled a 5 year boom.
While steady demand outran available inventories with an inflationary impact, supply side issues have added to the rising prices. In 2003, the Iraq War consumed millions of dollars of building materials, pushing prices up 30-50%. Fires in Southern California destroyed a thousand homes that then needed to be rebuilt. Supply shortages resulted in "Cost Push" inflation in the housing industry. While recently, costs have fallen for some materials, the impact of "Katrina" and "Rita" can already be seen in rising OSB and plywood prices at the local building supply stores.
People follow jobs! As employment increased in the greater Seattle area, prices increased and affordability issues pushed home buyers farther away from the urban center. While local home prices have risen sharply, they continue to be below prices being paid closer to Seattle.
The hottest Skagit County Market continues to be Anacortes. This market is fueled not by commuters, but an influx of retirees. This is seen in the rapid population growth, but a declining school enrollment. The rebound in the California real estate market "wealth effect" has returned Anacortes to the destination retirement place it was in 1989-90. California income and estate taxes contribute to the appeal of living in Washington.
The 40,000 "change of value" notices will be mailed out by the Skagit County Assessor's Office as part of three processes. Each year the Assessor's Office inspects about 25% of the parcels in Skagit County, and statistically reviews the remainder. Seventeen thousand properties in the Mount Vernon and Conway School Districts were inspected this year. An additional 3,000 inspections were done on properties involving new construction. The remaining notices are a result of statistical adjustments to bring non-inspected property values more in line with current sales prices. The valuations are based on a January 1, 2005 appraisal date, and will be used to allocate property taxes for 2006.
Unlike property taxes in many east coast states, property taxes in Washington are "budget based", not "rate based". Increasing assessed values do not result in increased tax collections, as is the case in a rated based system. The amount of tax to be collected is set by each local taxing jurisdiction. This is then divided by the total taxable assessed value to produce the levy rate. The levy rate multiplied by the assessed value of your property equals your tax bill. While changing assessed values do not increase collections, it does change how much individual property owners pay. This is called a tax shift. The goal in assessment is to be as accurate as possible, so that each property owner pays his or her fair and equitable share, based on value.
The rise in market sales prices means that the "change of value notices" will be reflecting increases in most values. Property owners who have questions about their new assessed values can call the Skagit County Assessor's Office at 360-336-9370, or stop bye. Office hours are from 8:30 am through 4:30 pm, Monday through Friday. In addition, information on individual properties is available on the internet at skagitcounty.net. For seniors and disabled persons, an exemption program is available for those with less than "$35,000 in household income" [as defined by Washington State Statute]. Seniors and disabled persons may also qualify for a state administered deferral program if the "household income is less that $40,000 per year.
If after review, property owners believe that their assessed value exceeds current market value, they can appeal to the Skagit County Board of Equalization. Appeal forms are available from the Board of Equalization at 360-336-9361, at the Assessor's Office, and on the web at skagitcounty.net.