Assessments down but market values up in Twin FallsAug 8th, 2016 | By Sarah Glenn | Category: Real Estate
TWIN FALLS — The city of Twin Falls says overall property values have declined from last year. But the total taxable value of properties is up.
How can that be?
There’s more to meets the eye when it comes to unpacking real estate, property values and taxes in Twin Falls this year. Changes to the the state’s homeowner’s exemption, shifts in the real estate market and new construction paint a muddy picture. But the takeaway for property owners: An overall drop in assessed value probably isn’t going to reflect on the potential sales price. And real estate experts say it’s still a seller’s market with home values increasing and homes selling fast in key price ranges.
Overall, the taxable value of existing properties in Twin Falls is down from last year, according to the Twin Falls County Assessor’s Office, but after a boost in new construction, the total taxable value of city properties is up 2.2 percent to $2.3 billion.
“Without new construction, all existing properties within the city of Twin Falls decreased by about $16.6 million,” City Manager Travis Rothweiler reported to City Council on Aug. 1.
The decreased taxable value of existing property is a puzzle to explain given that market values are increasing. As Rothweiler notes, assessed value and market value don’t necessarily correlate. Not only that, but taxable values tend to reflect backward, and an increased homeowner’s exemption could have affected some properties.
“Generally speaking, values are up,” said County Assessor Gerald “Gerry” Bowden, who couldn’t immediately comment on why assessed value on existing property was down.
But like Rothweiler, Bowden suspected some homes saw decreased taxable value due to a $5,000 increase in the homeowner’s exemption from last year.
The U.S. Census Bureau reported the median value of an owner-occupied home in Twin Falls was $144,000 in the 2016 fiscal year but $142,600 in the 2017 fiscal year.
Realtors, meanwhile, are telling another story on market price, Councilman Greg Lanting said during the Aug. 1 City Council meeting. From what he’s heard, market values are going up and it’s a seller’s market.
Rothweiler said the assessments reflect what values were 12 to 18 months ago, and might jump in a year or two to reflect today’s market.
The city had $67.1 million in new construction for this fiscal year, resulting in a $50.5 million increase in the value of the city overall, according to the assessor’s office figures Rothweiler presented. This was much higher than the city’s internal estimate of $40 million, based on building permits.
Rothweiler said with all the new construction activity in the last couple of years, he expects to see that reflected in the future because of a lag between the time construction starts and is finished. In 2011 — the height of the recession here — the city saw $68 million in new construction due to projects finishing, which is still the largest on record, he said.
“New construction in subsequent years we’re expecting to be equal with or be better than where we’re at right now,” he said.
Justin Winson, president of the Western Magic Valley Realtors, said lot values have doubled in some areas over 2006 prices.
“They increased just from March of this year,” he added.
In one subdivision this spring, homes were going for $250,000 to $280,000 — but now are $330,000 to $350,000, he said.
“That’s a considerable jump,” Winson said.
Builder Brad Wills said he has to agree with the Realtors — values are not going down, and homes are selling for more.
“As a buyer having gone out and looked, I can feel how the prices have gone up,” Western Magic Valley Realtors Association Executive Nancy Glaesemann said. “You can feel the competition.”
According to Intermountain MLS, the median price of homes sold within the Twin Falls school district area was $143,250 in 2014. It rose to $149,250 last year. For the year-to-date through Aug. 3, the median price was $159,950.
The highest number of listings were for homes between $160,000 and $199,999 and those between $300,000 and $399,999.
The MLS also shows how long homes of certain prices ranges have been on the market this year. The average days on the market was 63 — which Glaesemann said is fast given the average loan takes about 45 days to process.
Houses between $70,000 and $89,999 were listed for the shortest time this year, averaging 61 days. Not surprisingly, homes with a price tag of more than $500,000 were on the market the longest, 152 days.
“Under $175,000 tends to be really hot,” Winson said.
He believes there is a higher inventory of homes listed at more than $250,000, and the market there is sluggish.
In some areas, houses are selling so quickly the association has had trouble finding enough for its weekly home tour. One staff member said most everything in the southwest part of town is selling almost immediately.
Winson said the land value increases as more homes are constructed and lots developed.
“If the new construction gets a little high, it seems to bring the price up with existing construction as well,” he said.
The increase in prices result from higher costs to develop and purchase new construction, as the cost of materials to produce that same house go up, Winson said. What tends to negatively affect a value of an older home is the upkeep, he said.
Information from The Times-News, Twin Falls.