I'm what could be described as "land rich, cash poor."
Any day now I expect the King County assessor to tell me that my house is worth so much that I couldn’t afford to buy it. I’m what could be described as “land rich, cash poor.”
It’s one of those good news/bad news situations.
It’s good news if I were planning to sell my house. According to the county, my house has tripled in value in the past five years. Even better news is that the county tax man usually underestimates the value of homes, so the price I could get for my house could be five or six times what I originally paid for it.
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The amount the tax man figured my house was worth last year made me a wealthy man. Not Bill Gates wealthy, of course, but let’s say I would be “comfortable” if I sold our four-bedroom home and the Truly Unpleasant Mrs. Johnston and I lived in a tent in a state park where our children could visit us.
On the other hand, the assessment was bad news. Instead of high-fiving the wife and kids and screaming “We’re rich!” I was wishing the tax man would have said my humble house is worth a fraction of what I paid for it. I want the assessor to say my property taxes were being reduced.
Of course when it came time to sell the family home, I’d be changing my mind big-time, pleading for that grand assessment.
There are probably housing specialists who could blow holes in my dream of low assessment and high sale price, but let those people get their own column. This is my space.
Back in the 1980s when I was a reporter for The Seattle Times, I was talking to then-King County assessor Harley Hoppe about people protesting their property-tax bills. They were usually protesting that their house was appraised for too much and that made their property taxes too high.
Hoppe said he listened to the complaints, nodding his head in sympathy as the taxpayers went on and on about how unfair the tax was. Finally, Hoppe said, he would ask how much the taxpayer thought the house was worth. Of course the taxpayer would quote a price far below the county’s estimated value.
Wow, Hoppe would say, that seems like a low figure for such a nice home. Hoppe would then offer to buy the house for what the property owner thought the “real” assessed value should be. Hoppe said he would even kick in a few thousand bucks to sweeten the deal.
Funny, though. Hoppe said the homeowners never took him up on his offer. They always said their homes were worth much more. That trick would probably still work, but the present assessor doesn’t seem as prone to making such offers as Hoppe was.
For most people, their biggest asset is their home. They can get that “rich” feeling by looking at what homes in their neighborhoods are selling for. It’s easy to check by going to www.zillow.com and typing in your address. A map of your neighborhood pops up and shows a value on your property as well as your neighbors’. Before I start figuring what to do with all my money, I should remember what Seattle was like when I moved to the city from Everett during an economic slump in the early 1970s. That was when someone made a billboard that read: “Would The Last Person Leaving Seattle Please Turn Off The Lights?”
I bought my first house in the city for $27,000. It was a three-bedroom place in Madrona. The house — along with several hundred homes in King County that were foreclosed and turned over to the Department of Housing and Urban Development — was advertised in the newspaper. A minimum bid was set, then people could make their own bids.
My Madrona house had a minimum bid of $25,000, which I upped $2,000. When we sold it a few years later, we tripled the original price and thought we made a killing. But I did some checking and found out it recently sold for $556,000!
I was reminded of a guy I ran into back in the ’70s who told me he’d bought four homes in Seattle with all the dough he made selling his one home in San Francisco. If only I had done what that guy did and hung onto those homes! I’d be rich now. But the same could be said about most things. If I had bought Microsoft when Bill Gates started his little company, I’d be rich now. I could even afford to buy my house.
Steve Johnston is an occasional freelance writer and full-time observer of the local scene. Gabriel Campaniaro is a Seattle Times news artist.