So my real estate assessment dropped again… I believe we were assessed at $475K a bit ago, but I filed a bunch of paperwork and got them to drop it $10 or $20K. But this thing says our 2007 value was only $406K, which I don’t remember ever being that low. And for 2008? $376K.
That’s quite a drop, and the weird part is how the values flipped:
From 1999-2007, the value of my land only went from $150,000 to $166,000. That’s $2,000 a year. This year? Land is $296,000. WTF?!?! It goes up $2,000/yr for 9 years, then suddenly goes up $130,000/yr in 1 year? So the rate increased by 65X as much?!?!?!?! [UPDATE: On 3/25, new assessment made value of the land $184,000, so the change is not so drastic. Only 9X as much of a climb instead of 64X as much.]
The value of the building was $240,780 last year, and now is listed as $80,000. WTF?!? This is the first year that our home addition is legally recognized (I believe), so if anything it should have gone up, not down. [UPDATE: On 3/25, new assessment made value of the building $191,970, so it did go down, but not nearly as drasticly.]
Of course, if these numbers are true, that means our house could completely collapse into nothingness (say, from bad contractors), and the land would be worth $296K. [UPDATE: As of 3/25, this is no longer the case.] Considering we owe about $159K on the mortgage (which was originally $139K) , we’d still end up with $137K profit even if the house collapsed. [UPDATE: As of 3/25, we would only end up with about a $25K profit, instead of $137K profit, now that the house is worth $191K instead of $80K.]
This just doesn’t really make much sense to me. It’s almost like the county is trying to get back at me for having it lowered last year. Thing is, I WANT the land to be most of the value. Houses degrade; land doesn’t generally (barring a mudslide).
Claire's blog 
February 26, 2008 at 6:32 PM
That is kind of odd.
I’m not really sure if the addition would have increased the house value by much though, seeing as it only added square footage, but not any extra rooms. When the county and realtors run their analyses, they place much greater value on #of bedrooms/bathrooms vs square footage.
It might also have something to do with the trend around here, that before the market tanked, people were buying houses, only to tear them down and build a new house. Which kind of implies that it is really the land and not the building that they are paying for.
I’ll be interested to see what our tax assessment looks like this year.
February 26, 2008 at 6:34 PM
Then again, maybe it’s just a clerical error, and some idiot switched the two values when they were being entered into the computer?
February 26, 2008 at 6:44 PM
Carolyn proposed that, but the value of land going down, especially inside the beltway, seems both unlikely and in violation of all previous trends.
Even in Woodbridge, land ALWAYS went up. But who knows. I may try to call them and ask about it.
February 26, 2008 at 7:55 PM
FYI, we just got out tax assessment and it shows the same thing. The land and building values have basically flip flopped.
So either something funky is going on, or it’s a county wide computer glitch.
February 26, 2008 at 7:58 PM
I agree about land values generally not going down, but then again, we haven’t had a housing market this bad in decades.
February 26, 2008 at 9:18 PM
Both my condo AND the building that it’s in have gone down in value in the last year, quite a significant amount.
My condo has gone down by about 25K (from about 195K down to about 170K), which really, really surprised me. And I live in a pretty good area. I have the feeling this is happening to lots of people, though.
February 27, 2008 at 9:13 AM
Another anonymous contributor sent me their numbers:
“…they’re doing the same thing in our county…. Braddock Rd…seems to be fairly uniform – houses way down, land way up.”
Our assessments:
2004:
Land: $102,100
House: $325,400
Total: $427,500
2006:
Land: $204,100
House: $437,900
Total: $642,000
2008:
Land: $240,000
House: $267,000
Total: $507,000
I think they must have changed their formulas…in NoVa”
February 28, 2008 at 6:23 PM
“I think they must have changed their formulas…in NoVa”
Or, there’s someone who stands to gain gobbling up land when the housing debacle finally crashes – after this slow landing. Seems to me foreigners are buying our real estate, bridges, highways, utilities; maybe our .gov is thinking of selling our (real) fake estate from under us to pay our foreign debts. hmmm…?
Bluemont, VA
February 29, 2008 at 1:52 PM
hey, clint, when driving to a meeting this morning I heard a news item about this on wtop: http://www.wtop.com/?nid=722&sid=1354751
This should shed some light on this (and man, SAYING that sentence in my head boggled my brain!)
February 29, 2008 at 2:00 PM
Angel, thanks for the link!
So, my house is now worth less than what I paid for the addition. Prior to putting $80K in it, I guess it was worth negative money! Sheesh!
This is good and bad.
It’s bad because the money put into the addition doesn’t increase the assessed value of the house. But I would probably try to sell it over the assessed value specifically for that reason.
On the other hand, if my addition, built by Virginia Design Builders, should collapse…. And the whole house collapses with it — insurance doesn’t cover that type of thing. ever. But since the land value is now so high up, I would be way way way way way better off in that situation than I would be last year.
This flip-flop also means that upkeeping your house is a pointless money pit — the land will go up at a higher rate, even if your house is falling apart, then what you could possibly save via maintenence money. Remodeling your kitchen wont ever give you the value back that you put into it, and in fact, I could take a sledgehammer ot my kitchen, and my value would still go up — if all increases are now land increases.
Since I am a lazy homeowner, and don’t like to do a lot of maintenance, then i GUESS this is good for me.
February 29, 2008 at 3:43 PM
Even though this is kind of a big deal, it really doesn’t matter that much in the long run. It’s the overall assessment of the property that matters, not the division between house/land. Yes, it matters to someone who owns land only.
But most people nowadays want to buy a land with a house ON it. So no Clint, you can’t just let your house fall into disrepair and then expect to sell it for a profit, no matter what the county says it’s valued. It’s one thing if someone pays a certain amount for land cause they want to build on it. However, having to tear down/fix an existing structure might deter alot of buyers looking to build due to the additional expense of having to tear down the existing structure first and would certainly diminish the price they are willing to pay for it. In other words, a property the same size with no house might actually be more valuable to a buyer than a property with a house that’s not maintained. Realtors and prospective buyers value things differently than the county does. For the past few years, county assessments have been at about 25% below fair market value.
As far as insurance goes, why wouldn’t they pay if your house collapsed? Isn’t that the whole point of insurance? Yes, they make exceptions for things like floods, but it all depends on your policy.
And this is what really worries me. A lot of people, if they take the county assessment as a guideline, may start underinsuring their homes. The general guideline, is you get a policy big enough to insure the house, not the land. And if someone doesn’t know better, they may insure the house for what the county “assessment” is, which is most likely not enough to rebuild the same house.
February 29, 2008 at 3:48 PM
Insurance is for accidents, not maintenance. If your house collapsed due to faulty construction, insurance companies will not consider that an insurable event. Just like if your pipes flood, they will pay for your damaged stuff — but generally not to repair the pipes. They’re your pipes, and you’re supposed to maintain them on your own money, insurance or not. Insurance is only to cover losses due to accidents, not a free maintenence plan. So, if my addition was built shoddily, and fell due to that — not to an accident — I don’t think you’d find a single company that would pay a dime on that. Hell, when my next door neighbor’s house was condemned due to the mudslide during the hurricane season last year — her insurance wouldn’t give her a penny either. Floods aren’t covered either unless you get separate flood insurance, so they probably classified it under that. Fortunately all she had to do was remove her back deck to get un-condemned.
Most policies also don’t cover terrorism, so that leaves us depending on.. FEMA. Oh God.
February 29, 2008 at 3:52 PM
When I bought my house, houses were selling below the assessment, and people were complaining that they assessed them too high to get tax money — My how things have changed.
February 29, 2008 at 4:12 PM
Shoddy construction isn’t exactly lack of maintenance. I’m sure someone would be responsible for that, if not your insurance, then Virginia Design Builders’ insurance. Isn’t that why contractors are required to be insured?
Hmm, I’ll have to check my insurance clause about terrorism. FEMA is a scary thought indeed.
As far as for damaged stuff due to pipes, it depends. If it’s minor, they’ll pay. Then drop you. If the water level rose to a certain level due to a broken pipe(lets say you were on vacation when the pipe broke), then it’s considered a “flood” and you’re SOL.
February 29, 2008 at 4:15 PM
Contractors are required to be insured, as in — they have accident insurance while working, so they don’t sue the homeowner if they get injured. That has nothing to do with homeowners insurance. And even if it did — they only do that while working. If you build an addition for someone, you aren’t going to be expected to insure it for perpetuity – that’d be insane! Virginia Design Builders does not exist anymore … Their last day with a license was the day they decided the job was done (even though it wasn’t quite done). They are not paying any insurance premiums on my house right now! They’re busy fighting off multiple lawsuits (3), last I heard…
February 29, 2008 at 7:48 PM
Well, after looking over our policy, it doesn’t specifically exclude terrorism, but I guess that would fall under act of war, which is excluded.
However, it is nice to know that we ARE covered for volcanic eruptions. Seeing as we have so many volcanoes around here.
February 29, 2008 at 7:52 PM
You bet they would call it an act of war. Funny how the World Trade Center got covered for that — TWICE. Also funny how Larry Silverstein got the insurance 6 weeks before 911, and would have had to spend $150M to take the asbestos out. Even funnier how once all the asbestos was exploded in the air, the EPA commissioner (who has a conflict of interest with NY port authority) said the air was perfectly safe to breathe, and now there sick relief workers vastly outnumbering the actual deaths. But I digress.
As for volcano eruptions.. To para-quote the salesmen in Family Guy … “Don’t you think it’s about due?”
February 29, 2008 at 9:56 PM
Land appreciates — if the economy is good, if population is growing, if technology is moving forward. Buildings depreciate. A 2006 Federal Reserve Board study pegged the depreciation at 1.5% per year.
Your assessor may be getting better at his/her job. Are there teardowns occurring in your town in any great number? How do the assessed land values compare to the property-before-teardown transactions?
They may just be playing catch up, moving the assessed values to closer to genuine market values as of whatever date the valuation was done — that would account for valuations rising from the previous year, even while the month-to-month trend might be down, perhaps due to mortgage rates or mortgage availability, particularly jumbo loans.
Re: renovations/improvements. Nearly everything I’ve read says that, with the exception of adding a 2nd bathroom to a house with only one bathroom, and perhaps adding a deck, no other remodeling projects pay back as much as 100% of what they cost.
March 3, 2008 at 12:43 PM
Yea, I wish all these people who like to remodel their kitchen would listen to me when I tell them that.
But building an addition is not the same as remodeling. My house got 25% more square footage. So I would normally expect something back — a 2500 sq ft house on 0.4 acres generally sells more than a 2000 sq ft house on 0.4 acres.
March 3, 2008 at 12:43 PM
Angel sent me another email about this:
“Ah, something smells foul in Denmark: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/29/AR2008022903978.html?hpid=topnews
Looks like FFX is looking at re-evaluating how they came to those assessments. However, it doesn’t look like property values would change and that only the distribution between land and house values.
BTW, I’d be kind of pissed only because it sounds like they really aren’t accounting for the fact that there is a house on the land but mainly looking at what the land would be worth with nothing on it. So, it smells like they are trying to make money any way they can in a lean year when technically you should probably owe less.”
March 3, 2008 at 3:01 PM
#19
Unfortunately, it doesn’t quite work that way. When running comps, which is really what determines market price, real estate agents place lot more emphasis on #bedrooms/bathrooms than square footage. So yes, while a larger square footage 3br/2bth is worth more than a smaller 3br/2bth on the same lot, a smaller 4br/2bth is probably worth more than the larger 3br/2bth.
#20:
I don’t quite agree with the conspiracy theory that the county was trying to make money on this one. If the overall assessment changed, then yes, but it really didn’t affect the overall assessment. Now some may say that this is to increase the amount collected from land owners(with no house). But then what happens to condo owners? Is their apartment now worth less(since they own no land)? It seems it would about even out.
March 25, 2008 at 5:46 PM
Well, we got our new assessment….
Date: 2007/2008/2008
Total: $406K/$375K/$375K
Land: $166K/$296K/$184K
House: $240K/$80K/$192K
So, things on the building front aren’t quite as bad.
March 25, 2008 at 11:03 PM
The new assessment seems a lot more reasonable and you only took a less than 8% hit on the total compared to last year. We took a 21% hit on the total, but I won’t complain since it should lower our taxes and we don’t ever plan to sell.
February 24, 2009 at 6:40 PM
[…] Assessment – we only suffered 1/4th the loss of others Posted by Clint under Journal Last year’s real estate assessment was a big deal, even creating local headlines due to the way Fairfax County screwed up their calculations, as well […]
March 11, 2010 at 4:00 PM
[…] [NOTE: This post is an updated copy of the post I made last year, which was a copy of the post from 2008, which had tons of comments relating to how Fairfax County seemed to change its assessment] […]
February 24, 2011 at 7:53 PM
[…] is an updated copy of my 2010 post, which itself was an update of my 2009 post, which was a copy of 2008, which had tons of comments relating to how Fairfax County seemed to change its assessment […]