Property values higher than expected

Creating the county’s 2012 budget will be less painful than once thought. Property values in the county, as determined by the 2011 reappraisal process, are about the same as the 2009 values, and that’s considerably better than expected.

“Flat is good these days,” commented Larimer County Assessor Steve Miller.

Flat is particularly good in the halls of county government, where officials were bracing for a downturn in values. That would have meant a reduction in property taxes and fewer dollars in county and city coffers. Poudre School District and special taxing districts will also benefit from the better-than-expected property values.

The figures are not yet final, since the county just finished adjusting property values on protested assessments. The exact property valuation for Larimer County will be certified in August, Miller said.

Nonetheless, Miller is calling Larimer County the “economic star of the Front Range,” since the county did not see the drop in values experienced in many other areas. Overall, the value of property in the county is about $4 billion this year, the same as in 2009.

“It shows that, while the housing market nationally and in Colorado is not rebounding with any great energy, we’re holding our own,” said Miller.

Given all the grim news about the nationwide housing market, some property owners in Larimer County were surprised to see their property assessments rise this year.

More than 11,000 property owners protested the new valuations from the county assessor’s office. The deadline for protesting was June 1, and the assessor’s office planned to send out letters of determination about July 1. Protests were down somewhat from 2009, when about 13,000 were filed.

Local values stable

For the first time in 18 years, Miller said, Larimer County’s property values are more stable than those of metro Denver and Boulder County. This year’s assessments in Denver were down 5 to 6 percent, and Boulder County was down about 4 percent.

In January 2010, Miller warned the county commissioners that the 2011 assessment could see property values declining 6 to 8 percent from 2009. His predictions called for home prices going down 2 percent, commercial property 10 percent and vacant land 25 percent.

When the reappraisal process was finished, the numbers were much less dismal. “The real surprise,” Miller said, “was that commercial values didn’t decline at all.”

Home prices declined only 1 percent. Vacant land did indeed meet the expectation, declining by 25 percent, but that sector represents a small part of the county’s overall valuation.

Bob Keister, Larimer County’s budget manager, said the new figures will “have a big effect” on budget planning for 2012. “We won’t have to cut as hard and deep as we thought,” he stated.

His office had planned on an 8 percent property tax decline totaling about $8 million and affecting two years, 2011 and 2012. As a result, about $4 million was cut from the 2011 budget. Even high-priority county services were cut, and some departmental budgets were slashed as much as 6 percent.

Now, to play it safe, Keister is doing initial budget planning for 2012 based on a 2 percent reduction in property values. When the valuations are certified in August, “we could lighten up a little bit,” he said. He was initially looking at 40 to 60 additional layoffs for 2012, but that number could be significantly lower.

Keister said he hopes the big fluctuations in property valuations will level out for the benefit of county citizens. “We like to provide sustainable services,” he said, and that’s difficult when there are sharp swings in property values.

All property in the county is reappraised every two years, and values are based on comparable sales of a year or more prior. So, the 2011 assessed values were based on real estate markets as of June 30, 2010.

As usual, some areas in Larimer County saw a rise in assessed values while others saw property values drop. However, Miller said, even those areas with lower values were not down as much as expected.

“Property values are softer in the south part of the county,” Miller said, including Berthoud, parts of Loveland and the section of Windsor that lies in Larimer County. Fort Collins as a whole was flat, and Wellington’s values went down somewhat.

In the mountain areas, values depended on location.

Neighborhoods that saw increased values this year included Old Town and Village West, among others. Miller noted that subdivisions built in the 1970s and ’80s have been holding their own in terms of value. In contrast, values have dipped in some newer subdivisions, because they have experienced more foreclosures.

For residential property, Larimer County uses a mass appraisal method. This year, the county built 85 different models, using a different model for each neighborhood. Within neighborhoods, variables included single-family vs. condo/townhouse, size of main living area, size of basement, size of garage, design, quality of construction, location, site characteristics and date of sale.