Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
The real estate tax rate in the City of Harrisonburg might increase to $0.80 per $100 of assessed value per the City's proposed 2016-17 budget. As shown above, this would be a 36% increase in the tax rate over a five year period.
The context that might be missed by just looking at this increase includes....
Interested in knowing more?
Read today's article in the Daily News Record (City Eyes Tax Hike In Budget Proposal) or attend the public hearing on the budget this evening at the City Council meeting at 7PM in City Hall Council Chambers.
The City of Harrisonburg has released its proposed budget for the 2016-2017 fiscal year, and it includes a proposed $0.08 increase in the tax rate from $0.72 per $100 of assessed value up to $0.80 per $100 of assessed value.
A few excerpts of note from the City Manager's letter to City Council are included below. The bold sections are directly from the letter.
City costs are increasing as population increase, even without increases in services....
As noted last year, the impact of a growing community continues to have a significant effect on our budget. That trend continues this year as we added another 1,263 new residents as of July 1, 2015 per the Weldon Cooper Center population estimates. I have stated in my budget transmittal letter for several years that even if we are not adding new services or programs, we have more people needing/consuming the services, programs, and facilities that we already provide, and we have added more infrastructure to be operated and maintained (streets, sidewalks, bike trails, emergency communications, juvenile and adult detention facilities, athletic fields, etc.) in support of our services and programs.
Large new costs for 2016-17 include:
Natural revenue growth, while increasing, has not kept pace with the costs of all of the immediate needs.
Lots of new costs without significant new revenue resulted in a recommendation for increasing the real estate tax rate....
As City staff developed the budget, they had a gap of about $7.5 million between revenues and expenditures.
We began the development of the FY 16-17 general fund budget with a gap of about $7.5 million between anticipated revenues and expenditures. To varying degrees, all of the submitted requests had merit and were intended to address what department directors and management felt to be present or pending needs for providing services to our citizens.
This budget does not include any increases to any of the "discretionary" outside agencies (listed as "Contributions – Community and Civic Organizations" in the budget) that receive City funding, nor does it propose adding any new agencies, programs or projects for funding.
We attempted to build this budget based on available projected revenues and not expenditure requests, starting with a base revenue budget of just under $102 million (which included about $1.6 million in new revenue), less any use of fund balance. In spite of this effort, to meet the commitments we have in core service areas, a $3.15 million gap remains. As such, management believes an increase of approximately $0.08 in the real estate tax rate will be required to balance the FY 16-17 budget, pending Council direction as to other possible budget revisions or identification of reduction targets.
The draft budget (and above-referenced letter, and supporting documentation) can be found here ("2017 Proposed Budget"). Next, the budget will be reviewed by City Council and opportunities will exist for public comment.
The list above shows the 50 properties in Harrisonburg with the highest assessed values per the 2016 assessments. As you can see, JMU, apartment complexes and City schools are many of the most valuable properties.
Let's take a closer look at the top 10....
017 B 1
900 S MAIN ST
VISITORS JAMES MADISON UN
085 A 3
COMMONWEALTH OF VA VISITORS OF JMU
017 C 0-17
235 MARTIN LUTHER KING JR WAY
VISITORS OF JAMES MADISON UNIVERSITY
081 A 17
250 CHESTNUT RIDGE DR
COPPER BEECH TOWNHOME COMMUNITIES
018 D 2 3 5
VISITORS JAMES MADISON UN
086 D 1
UNIVERSITY BLVD VISITORS
JAMES MADISON UNIVERSITY
117 A 2
935 GARBERS CHURCH RD
HARRISONBURG CITY SCHOOL BOARD
078 C 3
1925 E MARKET ST
SM VALLEY MALL LLC
051 A 1
1301 HILLCREST DR
EASTERN MENNONITE COLLEGE & SEMINARY INC
072 A 16
SCHOOL BOARD OF THE CITY OF
Did your 2016 tax assessment go up or down? As shown above, most properties had the same tax assessed value in 2016 as compared to 2015....
Also of interest....
Updated assessed values were released earlier this month for all properties in the City of Harrisonburg, and they have now also been updated on HarrisonburgAssessments.com.
As per the December 3, 2015 Daily News Record article....
I recently created HarrisonburgAssessments.com, which analyzes the relationship between sales prices and assessed values. And then it hit me -- what if we compared list prices to assessed values -- might we find the best buying opportunities in and around Harrisonburg?
Introducing . . . . BestDealsInHarrisonburg.com!
Are the 30 properties on this new website REALLY the best deals in Harrisonburg? Possibly.
The properties featured on BestDealsInHarrisonburg.com are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet.
As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration.
What are you waiting for? Go check it out at BestDealsInHarrisonburg.com.
How, you might ask, do you find the assessed value of your home?
You can now search for your home's assessed value on HarrisonburgAssessements.com.
Before you go search, however, please remember that....
How do Assessed Values compare to Market Values?
Wonder no longer! You can now find out via HarrisonburgAssessments.com.
You'll want to visit this new site for full details, but here is a quick snapshot....
Find out more about the relationship between market values and assessed values at HarrisonburgAssessments.com.
The City of Harrisonburg may increase its tax rate from $0.63 (per $100 of assessed value) to $0.69. This would be a 9.5% increase in real estate taxes for property owners in the City of Harrisonburg.
This would still leave us with a very low tax rate compared to many other areas around Virginia:
As noted in today's in depth article in the Daily News Record:
Under the fiscal 2015 proposal to raise the rate 6 cents, the owner of a city home valued at $ 150,000 will pay $ 1,035 in real estate taxes, compared to $ 945 now. A house valued at $ 200,000 will be taxed at $ 1,380 next year, according to the draft. That owner pays $ 1,260 now.Read the DNR article here, and view the proposed City budget here.
Per the proposed budget published in the Daily News Record on 04/14/2014, Rockingham County is not proposing an increase in the real estate tax rate.
If the budget is approved as proposed, the tax rate would remain at $0.64 per $100 of assessed value.
Click here to view the entire proposed budget.
As recently published in the Shenandoah Valley Business Journal....
It's that time of year again, when homeowners (at least in the City of Harrisonburg) are receiving notices of the reassessment of their property. As you strive to understand the new (or current) assessment of your property, let's have a brief refresher course on real estate assessments. First, many people (erroneously) believe that the assessment of their property is an indication of their home's value. In actuality, the assessed value of a property is the value assigned to the property by the local assessor's office, for the purpose of determining how much you will pay in taxes. Certainly, the assessed value is intended to be the precise value of your home – but it is quite possible that there is a disparity in this assessed value and market value. The market value of your home is the price at which it would sell in the current market.
Sales Prices vs. Assessed Values in the City of Harrisonburg
To better understand how assessed values relate to market value, I checked on the 2014 assessed value for each of the 328 properties that sold between January 1, 2013 and November 30, 2013. What I discovered, is that properties in the City of Harrisonburg sold, on average, for 97% of their assessed value. Looking a bit deeper, just over a third of City properties (39%) sold within 5% of their assessed value – the remaining 61% had a sales price that was more than 5% higher or lower than the assessed value.
Sales Prices vs. Assessed Values in Rockingham County
Performing the same analysis in Rockingham County, we discover that County properties are selling for slightly more than their assessed value (average of 106%) as compared to City properties that are selling for a bit less than their assessed value (average of 97%).
Given the great variation in assessed values and market values, homeowners should not rely on their tax assessment for an understanding of their property's value. Furthermore, home buyers should not rely on assessed values to guide them in understanding the market value of a home that they might purchase. Both buyers and sellers should strive to understand the market value of a particular piece of real estate my analyzing similar homes that have recently sold and those currently on the market in a given neighborhood or price point.
The relationship between assessed values and sales prices varies based on the price, size, age and location of the home. For a more thorough analysis of the topic, visit HarrisonburgAssessments.com.
Learn More Here: City | County
The ASSESSED VALUE of a property is the value assigned to the property by the local assessor's office, for the purpose of determining how much you will pay in taxes.
The MARKET VALUE of a property is the price at which a property would sell in the current market.
As shown above, properties in the City of Harrisonburg tend to sell for a bit less than their assessed value.....while properties in Rockingham County tend to sell for a bit more than their assessed value.
However -- there is a great deal of variance --- explore the data via...
click here for more details
I frequently hear from homeowners wondering why their assessed value is so high AND from other homeowners wondering why their assessed value is so low.
Some homeowners know they could never sell their home for the assessed value, and others know they could it for more than the assessed value.
So, to further understand assessed values, let's explore their relationship to sales prices.
Click here to view a full comparison of 2013 Sales Prices and 2014 Assessed Values for the City of Harrisonburg.
As reported in today's Daily News Record, assessed values in the City of Harrisonburg stayed relatively stable over the past year. As shown above, the average assessed value of single family homes decreased 1% over the past year from $235,000 to $231,900. In the same time period, average sales prices increased by 3%.
A few clarifying notes....
New assessed values have been calculated for the City of Harrisonburg. These new assessed values will determine the property taxes that each property owner will pay in 2013 --- and the values are based on sales data from the previous year.
Harrisonburg has 12,531 taxable parcels, and roughly 9,000 of those parcels will see a change in their assessed values (and thus property taxes) for 2013.
How does this 1% overall decline in City property values compare to what we've seen in the Harrisonburg Rockingham Association of Realtors Multiple Listing Service (HRAR MLS)?
This 1% decline in assessed values may or may not be accompanied by a change in Harrisonburg's property tax rate. That rate increased from $0.59 (per $100) to $0.63 (per $100) effective July 1, 2012. City Council will discuss the property tax rate when the City develops the 2013/2014 budget.
As published yesterday in the Shenandoah Valley Business Journal.
Many people believe the assessment of their property istheir home's value. In actuality, theassessed value of a property is the value assigned to the property by the localassessor's office, for the purpose of determining how much you will pay intaxes. Certainly, the assessed value is intended to be the precise valueof your home – but quite frequently there is a disparity in this assessed valueand market value. The market value ofyour home is the price at which it would sell in the current market.
Of interest, the City of Harrisonburg real estateassessments are currently a bit more accurate than those in RockinghamCounty. As can be seen in theinfographic, homes sold during 2011 in the City of Harrisonburg sold for 95.1%of their current assessed value. Breaking it down further, 64% of the homes that sold during 2011 in theCity of Harrisonburg sold at a lower price point than their assessed value. This is an indication that many City propertyassessments are likely a bit too high.
In Rockingham County, most property assessments are too low –as 70% of properties that sold in 2011 sold for more than their assessed value– and on average, properties sold for 110% of their assessed value. Of note, homes in the City of Harrisonburgare re-assessed every year, while homes in Rockingham County are onlyre-assessed every four years. In thepast, this has resulted in lower than expected assessments in Rockingham Countydue to the infrequent updates to their assessed values.
Given the great variation in assessed values and marketvalues, homeowners should not rely on their tax assessment for an understandingof their property's value. Furthermore,home buyers should not rely on assessed values to guide them in understandingthe market value of a home that they might purchase. Both buyers and sellers should strive tounderstand the market value of a particular piece of real estate my analyzingsimilar homes that have recently sold and those currently on the market in agiven neighborhood or price point.
Click on either image below for a printable PDF....
The City of Harrisonburg is considering increasing the real estate tax rate from $0.59 per $100 of assessed value to $0.63 per $100 of assessed value. Rockingham County is also considering a $0.04 increase, from its current tax rate of $0.60 per $100 of assessed value to $0.64 per $100 of assessed value.
To understand the potential rationale behind such an increase, let's examine funding levels given a few assumptions to make the math a bit easier. First, we will assume that all tax assessments are at exactly 100% of the market value of properties. Second, we will assume that both Harrisonburg and Rockingham County are comprised of 1,000 privately owned homes. Third, we will assume that all homes have market values (and assessed values) of the median sales price.
As shown in the table above, the median sales price in the City of Harrisonburg declined 20% between 2008 and 2012 from $213,500 to $170,000. If the City of Harrisonburg were comprised of 1,000 median-priced homes, the tax base and thus the tax revenue would also decline by 20% from $1.26M to $1M. Even with the proposed $0.04 proposed increase in the tax rate (from $0.59 to $0.63) the tax revenue would still decline by 15% from $1.26M to $1.07M. In fact, the tax rate would need to increase to $0.74 (a 25% increase) in order to maintain the same tax revenue as in 2008 --- assuming that assessed values have tracked precisely with median sales prices.
As shown in the table above, the median sales price in Rockingham County declined 20% between 2008 and 2012 from $215,000 to $171,750. If Rockingham County were comprised of 1,000 median-priced homes, the tax base and thus the tax revenue would also decline by 20% from $1.29M to $1.03M. Even with the proposed $0.04 proposed increase in the tax rate (from $0.60 to $0.64) the tax revenue would still decline by 15% from $1.29M to $1.1M. In fact, the tax rate would need to increase to $0.75 (a 25% increase) in order to maintain the same tax revenue as in 2008 --- assuming that assessed values have tracked precisely with median sales prices.
I'm asked quite frequently about the relationship between home values and tax assessments. After a lengthy analysis of the 528 home sales in Rockingham County during 2011, as recorded in the HRAR MLS, here is what I'm finding....
(click here for the same information for the City of Harrisonburg)
click the infographic above for a printable PDF version.
The bottom line here is that County properties seem to be under-assessed by an average of 10%. Most buyers pay more than assessed value for the properties they purchase.
Some observations without knowing much about the budget:
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