Assessed home values climb amid active real estate market

Home values on Vashon have increased nearly 17 percent over last year, a spike many homeowners are familiar with from notices they have received from the King County Assessor’s Office.

The increase is tied to the active real estate market, officials in the assessor’s office say, and it has many people concerned about a corresponding increase in property taxes. But while taxes have been on the rise in King County in recent years, officials stress that home values do not correlate proportionally with property taxes: The average 17 percent increase in home value does not mean a 17 percent increase in taxes.

Assessor John Wilson made this point in a press release his office sent out last week. He noted that voters’ decisions on levies and elected officials’ budgets determine the total amount of tax to be collected. The value of individuals’ property, on the other hand, determines their share of that amount.

Bailey Stober, a spokesman for the assessor’s office, stressed the point about taxes as well.

“I cannot tell you about taxes,” he said last week. “It would be impossible to predict.”

As for the housing market on Vashon, Windermere’s Denise Katz confirmed that it is booming, with homes selling fast and many selling over the asking price. She added she expects people are shocked to see the high value of their homes when they receive their notices.

“People are probably just surprised by what the market has done, because we are surprised,” she said.

Buyers’ broker Emma Amiad called it a “mad sellers’ market,” but cautioned it is not uniformly so. From Jan. 1 to May 31, there were 50 sales on the island, she said. Twenty-two of those were over the asking price; 10 were at the asking price, and 19 were below asking price.

“There is craziness out there, but it is not universal,” she added. “Sellers cannot ask for any old thing and get it.”

Despite the increase in assessed values, Amiad said the new figures are low compared to current sale prices, adding that she expects a home assessed for $400,000 could sell for between $500,000 and $550,000.

“The bottom line is we are still being assessed well under the market value of homes,” she said.

As Stober indicated, predicting next year’s tax bills is impossible to do. However, if recent history is an indication, they will continue to rise. On Vashon in 2013, the median assessed home value was $291,000 with taxes of $3,877, according to Stober. In 2016, the median assessed home value was $370,000 with taxes of $4,482. This year, median value is $387,000 with taxes of $4,500. Next year, with the new increase figured in, the median assessed value will be $452,400, with property taxes still to be determined.

On Vashon, as is typical in the area, more than 50 percent of property taxes go toward voter-approved measures such as those that support local schools, parks and emergency services, as well as county-wide efforts, such as the Best Starts for Kids initiative. Aug. 1 is the deadline for measures to be included on the November ballot, so more will be known later this summer about potential changes to property taxes. However, some measures are already slated for the ballot — or appear likely to be headed there. Voters throughout the county will determine whether to renew the The Veterans and Human Services Levy — now with seniors added to it — making it the The Veterans, Seniors and Human Services Levy. The levy was first passed in 2005 and renewed in 2011. Closer to home, officials at Vashon Island Fire & Rescue are evaluating the district’s needs and will determine this summer if they will ask voters for more money — after having gone 25 years without asking to raise taxes.

For some groups of people feeling the property tax pinch, there is relief. In Washington, senior citizens and people with disabilities may be eligible for property tax exemptions or property tax deferrals. The household income limit for the exemption program is $40,000, and for the deferral program it is $45,000. Stober noted that the senior exemption program is particularly important to people in the assessor’s office. When Wilson took office in January of 2016, only about 1,000 people applied for the program each year. After a push to get the word out, about 5,000 applications came in last year. Still, he said, only about 17,000 of 40,000 people who are eligible are taking part in it, and his office would like to see more participation.

“We do not want seniors to be taxed out of their homes,” he added.

Additionally, Assessor Wilson and County Executive Dow Constantine are partnering on an initiative with state Rep. Pat Sullivan to make sure that anyone whose annual income is less than $40,000 and is over 61, or is disabled, will not have to pay toward the Veterans, Seniors and Human Services Levy, should it pass. County officials say they will either obtain authority from the Legislature to grant exemptions, or provide full rebates to all qualified residents.

Stating that home affordability is “a big deal” to the assessor, Stober noted that in the last two legislative sessions, Wilson has worked to introduce legislation that would provide a property tax break to those who would rent a space — such as in a small apartment building or in a mother-in-law unit — at an affordable rate. Others would have to pick up the tab, and the legislation was not successful.

“We will take another bite at the apple again this year,” he added.

Additionally, Stober said, Wilson is exploring the possibility of a homestead exemption for residents of King County. Such a program would take a base amount of a home’s value — such as $50,000 or $100,000 — and make it nontaxable. Programs are different in different states, he noted, and it has not yet been determined what might work here. In some places that have such a program, the exemption applies to everyone, regardless of income. In the last year, he added, more than $8 billion in new construction values were added to the tax roles in King County — potentially helping to increase the possibility of such an exemption here.

For now, though, islanders have plenty of company in seeing their home values go up. All communities the assessor’s office have completed assessments on so far have seen increases over 10 percent. At the low end, Lake Forest Park and Kenmore have increased more than 11 percent. Snoqualmie and North Bend are up 16 percent, and Des Moines, SeaTac and Kent saw the largest spike — more than 21 percent over last year.

In the midst of this picture, Seattle and its surrounding communities are growing at a historic pace, with some estimates indicating more than 1,000 people are moving to the area every week. Amiad noted that rents and sale prices are increasing thoughout the region, down to Chehalis, up to Marysville, east to the mountains and west into the Kitsap Peninsula. She summed up the situation succinctly.

“We are living in a highly desirable area,” she said.

Seniors and people with disabilities who are interested in property tax assistance should see the King County Assessor’s website and click on the “Common Questions” tab. Or call 296-3920.

Those who feel the assessor’s office made a mistake in valuing their property should call 296-7300.

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