Real estate in the real world

by YES! Staff

Joe Killian of the News & Record unleashed a fine piece of journalism Sunday with a story about property valuations in Guilford County. Since the last revaluation, it seems the tax base has increased significantly — to the tune of $360 million, a jump of 1.5 percent — even through the worst economic downturn since the Great Depression that encompassed a housing crisis with a record number of foreclosures and rampant market stagnation.

It’s the kind of work that’s becoming all too infrequent in newspapers these days: investigative journalism with a long arc that affects entire communities and holds those in power accountable for their actions. With cutbacks to staff and consolidation of beats happening in all major dailies, and paeans to the lowest common denominator — celebrity news, the waterskiing squirrel and the Huffington Posts Sideboob page are examples — taking precedence over actual reporting, it’s refreshing to see someone take on an actual story.

How is it possible for tax revenues to go up after home prices in the cou nt y have taken such a beating?

Killian has been following this issue for months, and in this  piece he attempts to address the million-dollar question:

How is it possible for tax revenues to go up after home prices in the county have taken such a beating?

The increase, according to the county tax assessors, comes from growth in the overall housing and commercial property stock, with a portion of homes in  the county actually increasing in value from 2004, when the housing market was near its peak.

Census numbers attest to some growth in the sector. In 2000, the county held more than 180,000 housing units; the 2010 number is 218,000, an increase in 21 percent. And the median value of those homes in that decade went up from about $117,000 to $154,000, almost 30 percent. During the same time period, population in the county jumped from 421,000 to 488,000.

At first blush, the numbers seemed counterintuitive to us, as well — we’ve been covering this story for about a year, and wondered whether we’d see a tax increase as a result of revaluation, reasoning that the decimation of the real estate market would have an overall negative affect on tax revenue.

But the equation has a lot of moving parts. What we’ve seen in Guilford County is a raise in the tax base — more homes, more homeowners — and the possibility that rapid gains on properties made between 2004-2008 were wiped out by the devastation that happened after October 2008, when everything went south.

Things look so good that the county has actually lowered property tax rates this year without cutting services. And those whose property values went down will see a real break in their taxes.

The beef resides with those whose properties went up in value, which is not something you see people complaining about very often.

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