Property values soar from 2006 to 2008
Glenwood Springs, CO Colorado
This year is a year of property reappraisal (revaluation) for all property in Colorado. Each county assessor in Colorado is reviewing sales that took place between Jan. 1, 2007, and June 30, 2008. This reappraisal happens every two years, and in May property owners receive a new Notice of Value. This Notice of Value or “appraisal” by the county assessor is the value of the property using an appraisal date of June 30, 2008, based on sales that occurred from Jan. 1, 2007, through June 30, 2008.
In January 2007 we were in a continuing boom in building, buying, and even some flipping of real estate. This all created an amazing appreciation in value, which peaked in summer 2008. We have reviewed more than 3,500 sales throughout the county that occurred in 2007 and the first half of 2008, and these sales demonstrate an overall market appreciation of 25 percent to 65 percent compared to values established using our last appraisal date of June 30, 2006. Tax bills for 2007 and 2008 (received in January 2008 and 2009, respectively) have been based on the values established in our last reappraisal using the appraisal date of June 30, 2006. Tax bills coming out in 2010 and 2011 will be based on the new Notice of Valuation coming out this May, which will represent the peak of the market just mentioned above.
One may reasonably ask, “Why isn’t property valued at what the market is today?” Current state law sets the parameters of the entire process, including the value date. This permits assessors to take the time to be fair and accurate and ensures equalization, another state-mandated aspect of property valuation that causes each class of property across the state to be treated equitably.
For the last 20 years, most properties gained value each reappraisal cycle. Each time I received my Notice of Valuation or appraisal from the county, I noticed that the value stated was lower than what I thought my property was worth on that day. Now, if it happens as some believe that values are declining, then I am likely to notice just the opposite ” that the value stated may be higher than what I think my property is worth on the day I get my Notice of Value.
In May, homeowners will be receiving a Notice of Valuation stating what their house was worth as of June 2008. Value is relative, and each and every property will be treated fairly at the same level of value until 2011 when today’s market conditions will be measured, and updated property values will emerge.
Over the past weeks and months, local citizens have seen a variety of headlines about the value of real estate in our mountain river valleys and across the state. Many of these headlines have been negative in outlook. The reality is that while the sales volume has declined sharply, sale prices and home values here have declined only a little, on average. None of the respected Realtors I quiz, nor others with recognized savvy in our market, have seen much price depreciation. One could argue that this is, in part, due to the lack of sales data. At the same time, no one is predicting any short-term return to the boom and frenzy of the past years. So, we may all watch, and in the words of the late great senator from Illinois, Everett McKinley Dirksen, gone now almost 40 years, “We shall see what we shall see.”
John Gorman is Garfield County assessor.
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