Property values soar in new evaluation
By Dwight Otwell Editor

Even with the number of real estate sales plummeting in the last year, the land that does sell is increasing in value.

Cherokee County Tax Appraiser Dan Bourscheid said that 95 percent of the data they have produced in the reevaluation of land in the county shows increases in property value. The reevaluation will be complete by January 1 and they will take effect on tax bills which property owners will receive next year, before the end of 2008.

"Everyone says that the real estate market is going to pot and real estate values are coming down," Bourscheid said. "We sat down and got some data and evidence on the number of sales and values."

Statistics prepared by the Cherokee County Mapping Department show a sharp, steady increase in number of property sales beginning in January of 2004, when there were 122 sales. Real estate agents and developers were going wild from then until May 2006, a time period of almost 2.5 years. The number of monthly sales was 322 that month as they were in November 2005.

A chart of sales shows a sharp downhill direction as sales decreased to a low of 127 in February 2007. Since then, number of sales have leveled off with 144 in June. That number matches the number of sales in May 2003 and September 2002, before the hectic increase in sales.

"You would think that values would go down and people would take less money for their houses," Bourscheid said.

The Southeast U.S. is seeing a slight decrease in value but that hasn't happened in western North Carolina. Buncombe County has seen values go up even though the number of sales is down.

A public hearing on the values was held Monday at the courthouse. About 35 people attended. The county commissioners, county manager and county tax appraisers were present.

County Tax Administrator Lynn Shore said the values have been set and the public hearing was to allow people to look at the values.

Shore said the county, by law, can't take in excess of what it needs to run the county. The Department of Revenue requies the county tax rate to be revenue neutral. But the Board of Commissioners must determine what they believe the county needs.

One man said the commmissioners have the ability to determie what the county needs - whether it needs eight-bay fire stations or other items that would increase taxes.

Commissioner David Sumpter said the needs of the county far outweigh the realities of the funds available. He said he hasn't committed to spending money on a new courthouse or on any large, costly endeaver. He said the board will in the coming months determine the county's core needs and needs for the future.

"We've not set any particular agenda. It is still open," he said.

Badger said the board of commissioners will start in March holding a series of budget meetings which will lead up to a public hearing on the budget in June and adoption of the budget before the new fiscal year begins on July 1.

To determine if values are going down, staying the same or increasing, the tax department looked at houses and property that sold within two years with the latter sales being in 2007. The county Mapping Department came up with 160 parcels that meets that criteria. Forty eight sales were eliminated as unreliable data and 112 pieces of properety were considered. Of those, 112 or 95 percent showed price increases. Following are some examples:

• A house in Valleytown outside Andrews sold in September 2006 for $97,500. It sold again in April 2007 for $116,000.

• A business in Andrews sold in January 2005 for $273,500 and that included two other parcels of land. In June 2007 it sold for $350,000, not including the other two parcels of land.

• In April 2005 property at Pisgah Woods, outside of Andrews, sold for $165,000. It sold for $222,000 in January 2006 and for $225,000 in May 2007.

• A 3.81 acre vacant lot in Timberwood Mountain Estates sold for $64,000 in July 2006 and for $103,000 in April 2007.

• Riverfront property in Beaver Ridge sold for $220,000 in December 2005 and for $253,000 in January 2007, a 15 percent increase in 13 months.

• An older house in the Town of Murphy sold for $142,000 in December 2005 and $170,000 in April 2007.

• A small, vacant lot, 1.74 acres, sold for $35,000 in April 2006 and for $50,000 in January 2007. Tar Hill subdivision is one of the most active subdivisions in the county and is close to Murphy and borders on national forest land. That is a 43 percent increase.

• Thirty-four acres with a doublewide mobile home on Candy Mountain Road in Hiwassee Dam sold for $320,000 in December 2005, $380,000 in September 2006 and $600,000 in May 2007. The property has some nice views but not mountaintop views.

• A log home in Wilderness Lake Estates on Lake Appalachia sold for $260,000 in December 2005 during the peak period of sales. But it sold for $405,000 in February 2007, near the low point in number of sales. Bourscheid said they saw a couple of values go down, which they can't account for.

Value of property is determined by what land is selling for in the vicinity of where you live. The tax department has broken the county down into 400 plus neighborhoods and sub-divisions. Structures are valued on the replacement cost minus depreciation.

"We talk to builders and look at data to determine replacement cost," Bourscheid said.

The average house is valued at $84.50 a square foot for the present reevaluation. Bourscheid said if the schedule of values is approved, that figure will be a starting point for determining value of houses. In 2004, the last reevaluation, the value was set at $60.40 per square foot as the starting point.

The appraisers doing the reevaluation use the same techniques as bank appraisers to determine value of land. The difference is that the tax department is doing mass appraisals. They are dealing with tens of thousands of parcels, Bourscheid said.

After the 2004 reevaluation the Cherokee County Board of Commissioners reduced the tax rate by .05 cents but property taxes were much higher on average anyway because property values went up so much.

The county commissioners set the tax rate. If they let the rate remain the same, property taxes will go up drastically. They can reduce the rate enough so that, even with the increased values, taxes will be about the same as last year. Or they can reduce the tax rate a little and taxes will still go up but not as much as if they let the rate remain the same.