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San Juans lose $1.7 billion in combined property value
Property assessments down,but not your tax bill
By Steve Wehrly, Journal reporter
The assessed value of all properties in San Juan County dropped by a combined $1.7 billion for 2013, an average of 21.4 percent, according to initial reports released by the county assessor.
Most property owners will see the assessed value of their property go down in 2013, but many assessments on Orcas Island went down even further- by more than 30 percent.
"That's due to the fact that those properties were last appraised in 2008 at the top of the market," Assessor Charles Zalmanek said.
The only properties in the county with an increased assessed value, Zalmanek adds, are "several large condominium boat slips at Capron's Landing."
He went on to explain that extreme adjustments would be unlikely to occur in the future because county appraisers will be reassessing the entire county every year, instead of every three years, using new statistical methods being implemented statewide by the Department of Revenue.
"In addition, we'll be doing on-site physical assessments on one-sixth of county properties every year," Zalmanek said.
The percentage drop in assessed values averages 18 percent on most of San Juan Island, but Friday Harbor properties saw a 21 percent drop. Because Lopez Island was recently assessed, the average reduction for most of that island was only 9 percent. Shaw Island assessments decreased by almost 22 percent.
Property assessments for 2013 began arriving last week in the mail. The downward trend of assessments doesn't mean your property tax bill will be reduced, however.
Under state law, the property tax levy rates are adjusted to produce a certain amount of revenue: if the assessed valuation goes down, the rate goes up to raise the same amount of money as in the previous year, plus a maximum of one percent as provided by state law. The converse is also true: if the assessed valuation rises, the rate (expressed as a "mil" - so many cents per thousand dollars of valuation) should go down, but the amount of property tax will usually remain the same, absent tax increases or reductions provided by law.
In fact, some properties may actually see their tax bills rise in 2013 because of technical differences between countywide tax levies and local taxing districts covering only parts of counties. In addition, tax bills on Lopez Island will rise because Lopezians voted in favor of a property tax levy to fund operations of the new Lopez Solid Waste Disposal District.
Do lower assessments mean that home prices will also go down? "No," said Gary Franklin, managing partner at Windermere Real Estate in Friday Harbor.The terms appraised value and assessed value are frequently used interchangeably by home buyers and sellers but the differences make for an apples and oranges type of comparison, Franklin said.
"Tax assessments have only a small effect on the market value of a home," he said, noting that the real driver of home sales prices are current market conditions, which are relatively stable right now. Franklin expects local market prices won't see significant increases for 12 to 18 months.
The same holds true for refinancing, according to Tony Fyrqvist of Islanders Bank, Friday Harbor branch.
"We're getting lots of refinancing applications because of low interest rates," Fyrqvist said. But lenders base loan amounts not on tax assessments, he explains, but on appraisal reports by certified appraisers, who look at "comparable sales" supported by "thorough on-site inspections and sometimes income potential for rental properties."
Zalmanek said assessed values would be adjusted after Dec. 31 to take into account end-of-year information, after which individual tax bills would be calculated and sent to island property owners early next year.
So what will be the dollar effect on property tax bills? Apparently not much.
Zalmanek points out with some pride that "San Juan County has absolutely the lowest combined levy rate in the state - and second place is not even close." San Juan County's combined levy rate is 5.35 percent. Second place is Kittitas County, at 7.76 percent. The average for all counties in the state, according to the Department of Revenue, is 11.14 percent.
Zalmanek also invites property owners to explore their assessments (and their neighbors' assessments) using the county's new on-line property search system. To search for property tax information, go to sanjuanco.com/assessor/parcelSearch.aspx.