Bristol, Va., property values forecast to jump 20 percent

BY DAVID McGEE
BRISTOL HERALD COURIER
BRISTOL, Va. – City homeowners can expect a little something in the mail this week – but it isn’t their tax refunds.
Property reappraisal notices are scheduled to be mailed Wednesday, with residential values expected to increase from 15 percent to 20 percent, said Terry Frye, the city’s commissioner of revenue.
“Overall, it’s probably about 20 percent for residential, but some properties don’t come close to 20 percent. Older properties, in older parts of town, will probably be less than that,” Frye said Thursday. “High-growth areas around [Interstate 81’s] Exit 7 will be more than that.”
A team of appraisers from the Staunton, Va., -based Blue Ridge Mass Appraisal Co., has spent the past 11 months visiting and evaluating more than 11,000 residential, commercial and industrial parcels citywide, project supervisor Steve Kite said.
Blue Ridge is the same group that also recently completed appraisals in Washington County, Va. The process is conducted every four years.
In reaching its figures, assessors also analyzed local home sales data and commercial growth, Kite said.
“We study sales in a locality since the last reassessment, but we really look at the last six months to a year,” Kite said. “Even though – as our president says – we’re in a crisis right now, sales values in this area have shown an upward trend.”
Higher values amid a struggling economy and the national mortgage meltdown might seem out of place, but a new report by the Federal Housing Finance Agency shows homes in both Bristols and Kingsport continue to buck the national trend.
In the Bristol-Kingsport Metropolitan Statistical Area, values of single-family homes increased 6.2 percent during 2008, including a 4 percent increase during the last three months of last year, according to the federal report.
By contrast, the U.S. average featured a 3.4 percent fourth-quarter decline, as home values tumbled 13.6 percent for all of 2008.
During the last three months of last year, the value of Tennessee homes declined an average of 2.77 percent statewide, while Virginia homes fell nearly 6 percent statewide. For the year, average values in the two states declined 3.9 percent and 10 percent, respectively.
The Bristol-Kingsport region’s five-year average reflected a 37.2 percent increase in home resale values, according to the report.
That is almost double Tennessee’s five-year average of a 19.1 percent increase and substantially above a nearly 23 percent five-year increase in Virginia home values.
“There is a widely held perception that the real estate market is down, due to the widespread foreclosures in places like Florida, California and Texas,” Frye said. “This area is different. We’re not experiencing nearly the numbers of foreclosures as other areas of the country, and banks here are local or regional banks that didn’t participate in some of the lending practices. So we’re seeing rising home values.”
Homeowners near Interstate 81’s Exit 7, for example, can expect to register higher values because they have easier access to amenities such as shopping and dining, Kite said.
The same is true for commercial buildings in downtown Bristol, Kite said, because of a widespread revitalization effort.
Commercial properties generally are expected to increase between 20 percent and 30 percent, Frye said.
Regardless of a building’s appraised value, the tax bill is computed by the city’s real estate tax rate.
“We don’t want anyone to pay more than their fair share,” Frye said. “And it isn’t the appraisal as much as the tax rate, which is set by the council, that affects the taxes you pay.”
Despite concerns about reduced revenues, city leaders contend they won’t try to balance their budget on higher appraisals.
Mayor Jim Rector said he would not support increasing the real estate tax rate and expects it will be rolled back.
“My crystal ball tells me the City Council will not pass all that on to the citizens,” Rector said. “I think we’ll try to keep it [tax bills] close to this year. There may be a small [effective] increase, but I do not think people can afford any increase in their taxes.”
During the past few years, city residents have been saddled with increases in the real estate and personal property taxes, assorted fees and drastically higher utility rates.
The city’s tax rate was last increased in fiscal 2006-07, from 98 cents to the current rate of $1.05 per $100 of assessed value. Four years ago, the post-reassessment tax rate was rolled back.
“I see no sentiment from this City Council, nor do I have any inclination, to pass the whole increase in real estate assessment on,” City Manager Bill Dennison said. “It’s too early to tell, but we’re not going to inflict any kind of major increase on taxpayers.”
A penny on the real estate tax represents $95,000, City Clerk Steve Allen said. Real estate taxes account for about $9.4 million of city revenues in the current budget.
That the figures are nearly complete is good news for city leaders who are struggling to assemble the skeleton of the fiscal 2009-10 spending plan, Dennison said.
“We can’t do anything until we get the figures from the assessment,” Dennison said. “That is a critical number for us to have because income from the real estate tax is our primary local funding source.”
Under state law, any city action resulting in a net 1 percent increase in tax bills related to the reappraisal means the City Council would have to conduct a public hearing before approving changes.
Before that happens, individual property owners have a series of options to challenge the new appraisals, Frye said.
Beginning March 16, homeowners can schedule a hearing with an assessor to review the results of their reappraisals. All hearings will be held inside City Hall, 300 Lee St.
“That’s an important part of the process, and people have two weeks to call and make an appointment,” Frye said. “We’ll have hearings as long as it takes.”
Because assessors don’t go inside homes, residents often can provide new information that would affect values, Frye said, adding sometimes the assessments have incorrect information about a home’s age, square footage or other circumstances.
About 300 property owners received a hearing four years ago, and many bills were adjusted, Frye said.
If unsatisfied with the outcome of the hearing, homeowners can go before the equalization board, a three-member panel of city residents appointed by Circuit Judge Larry B. Kirksey.
Those hearings are expected to begin in late March or early April, depending on how long the initial hearings take, Frye said.
Beyond that, homeowners have two years to appeal their appraisals to the Circuit Court. The last step is to bring their issues to the revenue commissioner, who can only make changes if there are factual errors in the appraisals.
Frye said the process always generates a number of appeals, but homeowners should consider more than just their tax bills.
“I want my home assessed at fair market value,” Frye said. “Your home is probably your most valuable asset. It’s important if you want to get an equity line of credit, a second mortgage or to sell your home. You don’t want to undervalue your home.”

dmcgee@bristolnews.com | (276) 645-2532