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Housing plunge hits home with reassessment
SoVaNow.com / May 14, 2014
Until recently, property values in Mecklenburg County had been largely unaffected by the bursting of the nationwide housing bubble.
Now, however, the market trend is having an impact: Mecklenburg’s latest two-year tax reassessment indicates that property values in the county have declined by about 3 percent, on average, said Commissioner of Revenue Ed Taylor.
Some people may have seen no change or a slight increase in the value of their homes, land and businesses, but Taylor said most residential owners — especially those with property around Buggs Island Lake and Lake Gaston — saw their assessments drop. Some even experienced reverse sticker shock after learning that the value of their homes had dropped $100,000 or more.
The one category of property that has appreciated in value is large commercial and industrial sites, said Taylor.
Taylor said he was not surprised by the results of the recent assessment. Historically, he said, the rise and fall in Southside Virginia property values lags about two to three years behind the trend in northern Virginia and the Tidewater area. From 2009 to 2010, values in those areas dropped by up to 30 percent.
“We here are fortunate because there were no massive defaults in home mortgages, not as much subprime lending or speculative development,” Taylor said by way of explaining why property owners in northern Virginia and the Tidewater saw drastic declines while owners in Mecklenburg County are experiencing a 3 percent reduction.
In some areas, entire subdivisions were built on speculative lending and building, and when the housing market collapsed, developers and homeowners defaulted on their loans, said Taylor.
Still, real estate values are strictly driven by local market data. The economic downturn, caused in large part by the housing market crash, has led to less income and a slump in area home sales, according to Taylor.
Mecklenburg County’s reassessment follows an exhaustive review of actual home sales in the previous two years.
The county stands to lose more than $400,000 in revenue as a result of declining a declining tax base. Supervisors are contemplating a rate adjustment which would restore the lost revenue, a move strongly opposed by supervisor Bill Blalock.
As Board Chairman Glenn Barbour pointed out, in years when property values increase, the Board adjusts the property tax rate downward insuring that the county does not receive a windfall when values rise. Adjusting the rate this year is in keeping with past practices, albeit the rate would rise instead of decline.
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