EDITOR’S NOTE: This is the first of a two-part series on property assessments and property taxes.
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SEQUIM — Sequim architect Clark Reeves and his wife, Austin, thought they’d found a “fairly safe” investment when they bought a house and land in the golf course community of SunLand last year at 4 percent below the assessed value of $316,000.
They rented out the former vacation abode and expected, as the years went by, to feel the ups and downs buffeting the nationwide housing market.
But they did not anticipate finding what they found Monday in their mailbox.
Their 2009 Clallam County tax assessment notice indicated their parcel had already lost 10 percent of its assessed value.
They were among 31,000 county residents who received notices mailed Nov. 13 indicating their property values were higher or lower in 2009 than in 2008 — an interim that saw property countywide plummet $300 million in value and new construction plunge almost 300 percent.
On average, property owners lost $9,700 in the value of their homes and land.
“It’s the first time we’ve seen such a decrease at this rate for many, many years,” Assessor Pam Rushton said.
Reeves’ confidence was a little bit shaken.
“I was surprised that the decline in SunLand was as much as it was,” Reeves, 61, said Tuesday.
“In my opinion, it’s one of the places in Sequim or the county that has the amenities and all to hold its own, and it didn’t.
“I bought in SunLand feeling it would be fairly safe.”
Less than they paid
In one year, according to the Rushton’s Friday the 13th notice, their SunLand property lost $31,125 in value — a 10 percent drop from its previously assessed value — to $284,875.
That was also $17,000 less than what they’d paid for it.
Still, while mailboxes across the county were full of surprises last week, reaction from property owners was muted, judging by the lack of complaint calls that Rushton received as of Friday, she said.
“Most of our inquiries are about the new notice of value forms, and we’re getting a lot of inquiries about senior exemptions,” she said.
The Assessor’s Office staff divides the county into six sections, physically inspecting one section every six years.
This year, 8,000 parcels were inspected in an area from Sequim east to Diamond Point.
The value of homes and land not physically inspected was determined by reviewing the sale of comparably priced land and homes in comparable areas.
County valuation down
All land and property in the county was valued at $8.3 billion compared to 2008’s $8.6 billion, though the impact on 2010 property tax bills is unknown.
This year, bank sales were added to the equation, a reflection of an increase in actual bank foreclosures and the increase in properties given back to banks in lieu of foreclosure, Rushton said.
The assessed parcels do not include senior tax exemptions, which have yet to be calculated, or tax-exempt, publicly-owned parcels and buildings held by taxing districts such as cities and schools, and state-assessed properties and parcels owned by power companies for transmission lines that cross county borders, Rushton said.
What’s known so far: 21,750 parcels lost $445 million in value, 2,400 parcels increased in value by $145 million, including just 550 parcels where new construction occurred, and 23,000 parcels recorded no change at all.
The Reeves’ other property where they actually live — an $800,100 parcel in the Woodcock Road-Sequim-Dungeness-Way area — fell into the no change category, increasing in value a measly $2.
New construction countywide, including unincorporated areas, also nosedived from $175 million in 2008 to $65 million in 2009.
The value of 2009 new construction included $12 million in the city of Sequim, $7 million in Port Angeles and $700,000 in Forks.
Computing assessments
Assessments are based on market value that county appraisers set after reviewing the sale of comparably priced land and homes that were sold after July 2008, when property values started dropping, Rushton said.
“It has to do with what the market is doing,” she said.
“We have a lot of supply and very little demand.”
Property owners can search for comparably priced homes by going to www.clallam.net, clicking on Assessor’s Office, clicking on “parcel/address search program,” and clicking on “sales search” in the upper right-had corner.
Higher than 2005
Even with the $300 million decline, 2009 values are still $3.3 billion higher than they were in 2005, when the county was assessed at $6 billion.
“We’ve gone through several years of prices increasing very rapidly,” Rushton said. “Now we’ve gone backward.”
Daphne Eshom, president of the Port Angeles Association of Realtors, was taking the free-fall in stride.
“I’m not worried, because that’s what’s happening in California and other places,” she said.
“Of course values are down because that’s what the market it dictating right now.”
Not all parcels lost value, in particular what Rushton call “marine-influenced” parcels.
Near the water
The closer the parcel is to the water, the more its value increased, she said.
The 2008 assessed valuation on those parcels was 60 percent to 70 percent of the 2009 sales amounts for similar properties, Rushton said.
So this year the valuation of marine-tinged properties increased because the market values increased, Rushton said.
By comparison, property values decreased 3 percent to 20 percent in the city of Port Angeles.
“If we had a house assessed at $300,000 in an area where we saw sales around $280,000, we would be lowering your value,” Rushton said.
Rushton’s first phone call about the new assessments was from a Port Angeles man who bought his west Port Angeles home in January 2008 and was disappointed that the new, lower value of his home will make it difficult for him to refinance.
“He never anticipated it would go down in value,” Rushton said.
But people in the market for a home will likely be happy with the drop, Eshom said.
The Reeves won’t be selling their SunLand property anytime soon, Clark Reeves said.
“I am assuming that at some point, the values are going to go back up to at least where I bought it at.”
In Jefferson County, the 2009 assessments, which will determine 2010 property taxes, showed property values within the city limit of Port Townsend increased 11 percent to $1.5 billion between Jan. 1, 2005, the last time Port Townsend was assessed on the county’s four-year assessment cycle, to Jan. 1, 2009, Assessor Jack Westerman said last week.
Jefferson County is divided into four sections for tax assessment purposes. Each section is physically inspected and a new valuation set once every four years. The new assessments are based on sales of comparable property from the time of the old assessment.
ON MONDAY: Even with a lower property value, a property owner may pay more intaxes. How does the system work?
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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.