Don’t spin on me

The spin is in, which is evident as we’re being told that recent sales figures in Augusta County indicate that the much-maligned reassessments are right on, if not a tad low given the market activity.
I call this spin, because we really know nothing about the parcels that we’re being told have been selling above their new reassessed values other than that they’re selling above their reassessed values.

I point that out because at first glance the numbers, reported by Bob Stuart in Wednesday’s News Virginian, come across as compelling. Stuart reported that Dave Hickey, president of Blue Ridge Mass Appraisal, the Staunton-based company that conducted the county’s reassessments on a $570,000 contract, had offered that January sales of 33 properties in the county went for a total of $5.85 million, more than $400,000 above their newly assessed values.

Hickey also told Stuart that properties sold in the county between August and December went for more than $73 million in total, above their new assessed aggregate value of $65.7 million.

The idea that Hickey is trying to leave us with is basically that we need to back off, because the properties that are selling are selling for more than what his company even said they were worth, which must mean his guys and gals had done their jobs right.

The fly in the ointment should be obvious. The sample here is only of properties that are selling. What about homes and properties that have been on the market for weeks and months and some cases years and haven’t had any interest? What impact should they have on our idea of market value?

A second flaw comes in the only comparison point I can come up with through my web research. The Virginia Association of Realtors publishes quarterly sales reports for localities and regions across the state. The numbers for our area are not broken down beyond Greater Augusta, which includes the county and the two cities, Staunton and Waynesboro. The trend regionally has been downward – from an average sale price of $211,820 in the third quarter of 2008, the months of July, August and September, to $194,148 in the fourth quarter, October, November and December. That’s an 8.4 percent decrease from one quarter to the next.

Looking at the longer-term trend, I looked at sales figures for January 2005, the beginning of the year of the last countywide reassessment. The average sales price in the Greater Augusta market that month was $171,751, meaning the average sale price at the end of the four-year cycle heading into 2009 had gone up 13 percent, less than half the aggregate reassessment increase that we’re looking at today.

I am sure that it can and will be argued that the numbers for Greater Augusta are just as skewed as I’m saying the localized county sales numbers for January are because in the case of the Greater Augusta numbers we’re including for comparison sales in Staunton and Waynesboro. I think that’s an interesting argument to make, because it to me gets us to the heart of the matter involving these reassessments, namely that the people being affected most by this aren’t the city-dweller types, and we have plenty of those in the county, in our urban growth areas in Fishersville and Stuarts Draft and ringing around Staunton, but the folks in more rural areas whose lands are being assessed at being reassessed at developable-land rates.

I’ve met my share of new millionaires created by this assessment who would gladly sign me over their properties if I’d cut them a check for what they’ve been assessed at. They know they’re not going to get anything close to what the assessor is saying they’d get on the open market because no developer with a lick of common sense is building right now, and won’t be for the foreseeable future.

And that’s not spin. And I’d think that we’d all appreciate if the people that we’re paying to do this work for us, to the tune of $570,000 in the case of Blue Ridge Mass Appraisal, would commit their time and the money that we’re paying them to give us their time to finishing the job instead of trying to browbeat us into thinking that they’ve already done.

 

– Column by Chris Graham

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