The Real Estate Deal

Editor Cindy Zetts dishes on real-estate and development around Puget Sound: She lived in apartments, townhomes and houses -- a dozen of them in four states -- before settling in the Seattle area in 1997. After taking a bath on the sale of her first home, in South Florida, she vowed to wise up about real estate. She bought a house in Covington 10 years ago because, well, she could afford one there.

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August 14, 2008 10:47 AM

Real-estate values: Craziness about assessments

Posted by Cindy Zetts

The phones have been going crazy -- again. What's with those 2008 King County property assessments? Readers who aren't angry about their assessed values going up are completely confused about how their land values could have risen while their home values fell.

I've addressed the question about higher property values, and I will share what I learned in 2005, when my assessment showed higher land value and lower home value.

In my confusion, I turned to an expert -- residential real-estate reporter Elizabeth Rhodes, who turned my confusion into a question for her Home Forum column. Here's the answer we published after Elizabeth talked with the King County Assessor's Office:

While the assessed value is supposed to mirror the market value, they're not the same thing, said Stan Roe, who's with the King County Assessor's Office.

"The market sells it as one piece," Roe said. "They don't look at it separately as land and house. But by law, we have to split it out."

Indeed, state law says, the assessor must value the land as if it were vacant. After the land value is determined, the assessor determines the total value of the property. Then the land's worth is subtracted from the total and the remainder becomes the value of the building.

"If land costs are going up, something has to give on the other end," Roe said, "because we can't adjust the total. It has to equal 100 percent of the market. That's why you see a lot of properties on Lake Washington that may only have $1,000 value on the house because the real value is in the land."

Is valuing properties this way a bad deal for homeowners? Not really because it doesn't control market value, and it may even help keep taxes down. For more on valuation, visit the King County property assessor's Web site.

If that doesn't help, you can ask King County Tax Advisor Barbara Alsheikh, who will be at The Times at noon Sept. 4 for a live question-and-answer session.

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