Owners of residential properties in Nez Perce County will continue to see their assessed values rise this year after the boiling real estate market of 2021 forced upward adjustments for every category of single-family homes.
But assessor Dan Anderson said a concomitant increase in the number of new taxpayers will help mitigate any resulting property tax increases.
“Just because your home’s assessed value may go up 20% doesn’t mean your taxes go up 20%,” Anderson said. “Of course, homeowners will pay more, but there are more players helping to lighten the tax bill by spreading it out.”
The sharp increases in home values were caused by a very limited supply of single-family homes that caused people to pay well above the estimated value – or even the asking price – last year. The valuations for this year are based on retail sales for calendar year 2021, a year in which Anderson said bidding wars between potential buyers had become the norm.
This ultimately puts more and more pressure on landlords in the county. Anderson described the property tax component of local government budgets as a balloon that can only hold a certain amount of money. And when residential values increase while other property values stay the same, the tax burden shifts.
“What it reflects is who’s paying the most money, like squeezing that ball,” he said. “The amount of air is still the same, but it’s a lot less on one side and a lot more on the other. And in this case, when you squeeze it, we’re talking about residential properties.
But the silver lining is a tax base that is growing at a significant rate. Deputy Senior Assessment Coordinator Brad Bovey said in 2019 the county saw 88 new homes built and six new commercial buildings; in 2020, 93 new housing units and 7 tertiary buildings; and in 2021, 95 new housing and 11 new commercial buildings.
“So in just 2021 we had a total of 106 new taxpayers,” Bovey said. “So these people take the weight off of you and me.”
Bovey also shared real estate sales numbers over the past three years, which indicate an accelerating pace of new home starts. In 2019, there were 546 residential sales in Nez Percé County, 52 bare land sales and 91 manufactured home sales. In 2020, there were 592 residential sales, 76 bare land sales and 83 manufactured home sales. And while residential home sales in 2021 rose slightly from the previous year to 610 and manufactured home sales fell slightly to 80, there was a huge increase in bare land sales to 168. This is more than double the number from the previous year.
“So this bare land will turn into new homes,” Bovey said.
And because Anderson’s appraisers factored all the high selling prices into their formulas, they find that most single-family home categories are undervalued, with current values between 72% and 92% of market value. So most homeowners will see their value increase again when appraisals are sent out this spring.
“In other words, the buyers paid more than the appraised value,” he said. “By a heap.”
He added that an expected rise in interest rates should slow the spending spree, except for people who managed to make a bundle selling their homes in other states and then bring that pocket of cash into Idaho.
Anderson noted that more than 150 single-family home sales last year were rentals, a development that further aggravated the already sluggish rental market.
“There were people who recognized the market was good, and they decided to go ahead and sell those rentals,” he said, using a 750-square-foot home, two bedrooms and a bathroom that sells for $230,000 as an example. “They go, ‘Gee whiz Doris, I think we just have to get this out there and see what we can get.’ ”
But he concluded that what goes up must eventually come down, a cycle that has never failed in his 34 years in office.
In Asotin County, new construction and updated tax assessments can help reduce the overall tax burden for individual homeowners as debt is more spread out.
According to assessor Jenny Rynearson, 1,155 households with elderly or disabled residents receive property tax relief. More than 8,500 single-family residences in the county pay the full tax rate.
Asotin County is on track to collect $21.9 million in property taxes this year, Rynearson said.
“Property taxes are extremely critical to schools, local governments, library operating budgets, cities, emergency medical services and other things we all depend on,” she said in a recent Tribune article.
In Latah County, annual property assessments have increased. Most residential and commercial property owners have seen their assessments increase over the past year, according to Latah County Assessor Rod Wakefield.
“The appraiser’s office is responsible for monitoring sales and adjusting home values based on sales trends,” Wakefield wrote in a press release last year. “We don’t fix the market or speculate; we respond to the market as it happened.
The average sale price of a single-family home in Moscow was $305,343 in 2019, $330,401 in 2020, and $333,401 until April 2021.
According to Whitman County Assessor Wraylee Flodin, the county is not seeing a large increase in values on the assessment, but it is seeing a significant number of property sales.
“More people are selling because of the market and more people are buying because of the market,” she said.
Whitman County has experienced declining growth in total property taxes levied over the past three years. It saw an increase of $7 million from 2019-20. Then an increase of $2 million the following year. It’s up just under $1 million from 2021-22.
In Whitman County, all real estate is reassessed annually, with a physical inspection performed at least once every six years. New constructions are assessed annually.
Flodin said new construction is on the tax rolls, but is proceeding slowly due to a shortage of supplies and workers.
Editor’s Note: After 19 years of stellar reporting for the Lewiston Tribune, Joel Mills has left the paper and is now a victims’ advocate and legal assistant in the Nez Perce County District Attorney’s Office. The Tribune wishes him good luck. Kerri Sandaine of the Tribune and Angela Palermo and Anthony Kuipers of the Moscow-Pullman Daily News contributed to this report.