For what it’s worth

Assessing property often requires a judgment call, especially when selecting comps, deciding how the properties measure up against one another and evaluating condition. What frustrates me as a taxpayer is that the county assessors always err in the county’s favor.

According to the property tax office, the assessed value should reflect 100 percent of the property’s market value on Jan. 1 of the year of the revaluation. Our most recent revaluation was in 2009. The assessment process begins well more than a year earlier. The county begins selecting comparable sales and decides on a valuation even as the market changes. Property owners pay taxes on the assessed value until the next revaluation. Typically, Orange County revalues every four years.

When the real estate market is appreciating, taxpayers catch a break. A property owner who sold his home in December 2004 would have been able to sell it for more than the tax value, which should have reflected the full market value of the home on Jan. 1, 2001, even though he had been paying taxes on the 2001 value for nearly four years. The assessors may have started the process in late 1999, and raised the assessed value above the comps to compensate for the expected rise in the market. It was in the property owner’s best interest not to challenge the revaluation, because reassessing its value would likely result in a higher value, and he would pay more taxes, even if the tax rate had not changed.

But for the 2009 revaluation, the market had started to fall during the assessment process. It appears that the assessors did not take that into consideration, setting values as if the market would rise at its traditional steady pace. It did not apply the logic it used in a rising market, when it boosted the value to match the anticipated strong market, by lowering the value in anticipation of a weak market. By the time the revaluation process had finished, the real estate market was in a relative nosedive. The valuations were significantly higher than the price properties would fetch on the open market. Owners, naturally, challenged their revaluations. I don’t know of anyone who had their valuations dropped more than 10 percent. And I saw lots of real estate ads touting “Priced below tax value!”

Even if the real estate market stays soft through the next revaluation, expected in 2013, it is unlikely that property owners will see lower assessments. If word leaked out that property values were declining, that could affect our prized AAA rating. Chapel Hill might be dropped from the magazine lists of Top Places to Live. Town manager Roger Stancil and Mayor Mark Kleinschmidt would race each other to the tax assessor’s office to stop that scenario.

Don and I live in a neighborhood that the tax assessor expects will increase in value once Carolina North is built. All the homes are assessed at a value higher than what they would sell for at present. On Saturday nights, when we can’t afford to go to the movies because we’re saving up to pay our tax bill, we sit on the couch and look at our tax valuation and fantasize about being as wealthy as the tax assessor thinks we are.
– Nancy Oates

Share and Enjoy:
  • Print
  • Digg
  • StumbleUpon
  • Facebook
  • Yahoo! Buzz
  • Twitter
  • Google Bookmarks
Leave a comment


  1. Duncan O'Malley

     /  November 4, 2010

    Look at it on the bright side, Nancy. The new AHEC hangar is well on its way to being completed at RDU. When UNC moves the planes there sometime next spring, the airport will finally close and you’ll get a little more peace and quiet.

  2. Fred Black

     /  November 4, 2010

    A home near HWA with a new assessed value of $449,630 just sold for $550,100. It’s all about what someone is willing to pay.

  3. Steve J.

     /  November 4, 2010


    The new AHEC hangar’s construction has quietly been halted due to the Alexandria Partners pull-out. Archer Western has plenty to do working elsewhere at RDU, anyway, these days. With no cash-paying tenant for the Horace Williams property, saner heads will finally prevail. Any knowledgeable, foresightful person would realize that in 50 years, with charges in transportation technology (ironically, some of which are being grown here in our own Tar Heel State) what we’ll value more then will be the wisely-preserved runway, not more ego-fueled named edifices.

    The State doesn’t have any money to do so much as install new signs at ‘Carolina North’ … whatever that is … much less $95 million for a new law school. Erskine Bowles just today spoke of possibly having to close one of the 16 UNC campuses based on the upcoming budget cuts. Do you think he’s the sort of guy who lapses into hyperbole easily?

    With the Republicans now in charge of the State Legislature, I’ll bet you’ll see the friendly, historic navigation beacon at KIGX shining brightly for some time to come.

    Fred’s point is well taken, and I begrudgingly offer my endorsement. I cannot stand the insane tax RATE we have in this County … but the valuations, much as detest them as well, aren’t far off the mark.

  4. Duncan O'Malley

     /  November 5, 2010

    Steve J.

    Contrary to what you may think, the new AHEC hangar construction is well underway at RDU. I had to take someone to the airport this morning and took a drive by the site.

    Some exterior walls are already up and steel beams are in place. And there were at least a dozen people working.

    HWA advocates will be hard-pressed to find a reason for UNC to justify pumping money into the old place when there’s a brand new hangar waiting for them at RDU.

    Check it out.

  5. Mark Marcoplos

     /  November 7, 2010

    Duncan – where is the site located?

  6. Duncan O'Malley

     /  November 7, 2010

    The new AHEC hangar is located on International Drive just before Park & Ride lot #2.