Washington Business Journal released an article on Monday, September 14th, 2009 that said Arlington County is expected to see a 5 – 12% decline in Real Estate Revenue during 2010.
Revenue from Real Estate TAXES are expected to decline.
Taxes collected on the ASSESSED value, not necessarily the MARKET VALUE.
Arlington County Real Estate Tax Assessments are calculated as follows:
Annual Tax Rate * County Assessed Value = Taxes Collected
2010 Tax Rates: $0.865 per $100 assessed value
Assessments for 2010 are the county’s appraisal of value on January 1, 2010, based on sales from July 1, 2008 to June 30, 2009.
This does NOT mean they’re giving you a 100% prediction sales prices will decline by 5-12% next year. Nobody can tell you that – not without a crystal ball!
But the reason they can predict declines in assessments are based on the numbers we have for the end of 2008 into mid-2009, which many have said is now the bottom of the market for Arlington County, VA. The Northern Virginia Association of Realtors(R) (NVAR) produces a quarterly report on the real estate market by county. Here’s a summary of their findings:
Notice their forecast for the first quarter of 2009 was an increase in average price.
Based on the numbers, you can see the trend indicates an increase in average sale price. July 2009’s average is $523,379, and August is $537,120.
**All of these numbers are just averages. They’re indicates of the market as a whole, which is generally useless when you’re trying to price a specific property in a very specific neighborhood. The same goes with the tax assessment – it’s another indicator. It’s not a price written in stone, or an end-all-be-all indicator of any type of value – especially when it’s now September, and the value was assessed in January.
Questions? Call me. This stuff is hard to really get into in a blog, but just be aware that the article was referencing funds collected by the government on a value the government places on a real property.
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