Monday, May 4, 2009

Nashville homeowners skeptical of new property values

Metro reappraisals buck real estate downturn By Michael Cass • THE TENNESSEAN • May 4, 2009 Property in Nashville's core is hot — dangerously hot for some. "Maybe some people are glad their property values have gone up so much," said Green Hills resident Connie Cowan. "I just don't like to pay a lot of taxes." Cowan was one of about 80 West Nashville residents who showed up Tuesday to hear Davidson County's property assessor talk about the most recent countywide reappraisal, which will result in higher taxes for many people. The assessor, George Rooker Jr., and his staff determined that values are up an average of 16 percent since the last reappraisal in 2005. The numbers startled many property owners, who say their homes can't possibly be worth so much in a recession that has eroded the housing market over the past year. "No way could I sell my house for that!" said Carol Armes, a Realtor whose Whitland Avenue home was appraised at $918,900, up 19 percent from its previous value of $771,500. The people whose values are up the most are generally concentrated in and around the center of the city, not on the suburban edges. Data provided by Rooker's office show the highest average increases are in ZIP codes covering East Nashville, MetroCenter, Hillsboro Village, Berry Hill, Belle Meade and a few other areas. "It reflects the fact that we have a vibrant downtown and vibrant neighborhoods surrounding downtown," Mayor Karl Dean said. "That's a good thing." But the news is not all rosy. "Unfortunately, most of you are going to pay more," Metro Councilman Carter Todd, who represents parts of Green Hills and Oak Hill, told residents during Tuesday's meeting at Julia Green Elementary School. Kenny Byrd, president of the Historic Edgefield neighborhood association a few blocks east of the Cumberland River, said he's pleased if the reappraisal represents recognition that "everybody wants to live in East Nashville." He said he doesn't plan to appeal his new appraisal. "But I do want to make sure that East Nashville is being treated fairly by Metro in how it's appraised," Byrd said. Owners can ask for a review Property owners whose values increased 16 percent or more generally will pay higher taxes later this year, while those with smaller increases generally will pay less, redistributing the tax burden. Dean said last week that he wouldn't ask the council to raise the certified tax rate back up after the state lowers it this year, as it's required to do to ensure the reappraisal itself doesn't bring in more revenue. Rooker said he expects the tax rate to drop from $4.69 per $100 of assessed value to about $4.13 in Metro's Urban Services District, while the rate in the General Services District should decline from $4.04 to about $3.56. Assessed value is 25 percent of appraised value for residential property and 40 percent of appraised value for commercial property. Property owners can ask the assessor's office for an informal review if they think their appraisals are unrealistic. Historically, values have gone down after about half of the reviews, Rooker said. Some property values skyrocket Rooker said his office gave extra weight to home sales in 2008 to reflect the downturn in the housing market. But a booming market in 2005, 2006 and most of 2007 more than made up for the recent troubles. "The market out there has just been really strong," he said. The latest appraisals reflect the assessor's office's determination of fair market value — what a willing buyer would pay a willing seller — as of Jan. 1. Rooker said the county's appraisers are simply trying to estimate market value, and they don't think in terms of increases in property values, since they can't generate more revenue for the county. But that comment didn't go over well with some in the audience at Julia Green, who said they expect the city to raise the tax rate in a year or two, hitting their pocketbooks again. "You may not consider it," Cowan told Rooker, "but we're the taxpayers." Richard Exton, a property appraiser with his own business, said the county's average increase seems reasonable, based on market trends since 2005. But he was less impressed with the reappraisal of his own Green Hills home, which shot from $260,600 to $480,500 — an 84 percent spike. "I'll be in line with everybody else, waiting for a review," Exton said Wednesday. The assessor's office raised the value of Exton's land by more than $240,000 while reducing the value of his house. Some people at the community meeting Tuesday, like Jim Thompson, voiced a similar concern. Thompson's land was appraised at $265,000, nearly 66 percent above its 2005 value of $160,000. He lives near Montgomery Bell Academy off West End Avenue. Rooker said some parts of the city have seen buyers tearing down houses and building new homes, sometimes called "McMansions." He said that essentially turns the transaction into a land sale, jacking up values. "Suddenly that land value is just so high," he said. Gwen Adams' Fatherland Street home in East Nashville was reappraised at $495,600, more than 55 percent higher than its $318,800 value in 2005. The land alone jumped from $40,000 to $100,000, a 150 percent increase. "I'd like to be optimistic and think it would bring that much money," Adams said. "But it won't." Cities move back toward the core Councilman Mike Jameson, whose district stretches from East Nashville to downtown, said the good news is that the center of the city is growing. "Cities are now moving back toward the core," Jameson said. "The Planning Department wants to prevent urban sprawl. This is a testament to their success. But that doesn't make it more palatable when you get your assessment." Rooker, who lives in Inglewood east of downtown, said the growth of property values in the core reflects recent market dynamics. In Germantown, just north of downtown, lots were appraised for $10,000 a few years ago, "and people couldn't give them away," he said. "Now, if you can buy one for $60,000 or $70,000, you're doing great." Councilman Jason Holleman represents Sylvan Park a few miles west of downtown but grew up in South Nashville. He said reappraisals followed the opposite pattern when he was younger: The edges of the city were hot, while the core was cool. "The value of the heart of the city of Nashville is growing," Holleman said, "which probably hadn't happened until five or six years ago in the past 30 years."

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