Three houses in a Kirkland subdivision, all built about the same time by the same developer with the same upscale finishes, got widely varying values from the King County assessor. As 2016 valuations are released, the homeowners ask, “How arbitrary is this process?”
Three houses in a Kirkland subdivision were built about the same time, by the same developer, in the same contemporary Craftsman style. Each features a two-car garage, stone fireplace and a kitchen with stainless-steel appliances and granite countertops. The square footage ranges from 3,120 to 4,150 over three floors, but the owners say the houses are more alike than not.
But when the three neighbors received their 2015 property valuations last year from the King County Assessor’s Office, the values ranged from $876,000 to $1 million. What’s more, two rose over the previous year by about $70,000 while the third, the one with the lowest value, didn’t go up at all, despite the Eastside’s red-hot housing market.
The homeowners, who all moved in as their new houses were completed in 2012 and 2013, compared the valuations and scratched their heads.
Appealing an assessment
• Property-tax assessments can be appealed within 60 days of receipt. For more information, call 206-296-7300 or visit http://www.kingcounty.gov/independent/board-of-appeals.aspx
• Seniors who live in their homes and make less than $40,000 per year may be eligible for property-tax relief. For more information call 206-296-3920.
“It feels more than arbitrary to us. We share information about our assessments. It seems completely inconsistent,” said Kevin Baney, who lives with his wife and two daughters in the middle home.
The Baneys appealed their $912,000 value, based on the lower value of the third neighbor’s house, the slightly smaller square footage of their house and other comparable sales in the area. It was turned down in May.
As the Assessor’s Office begins sending out 2016 valuations over the next two months, other homeowners may question how the values are calculated, how those relate to their property taxes and whether or not the determinations are reasonable.
“Our team of appraisers works extremely hard to set fair and accurate values across King County,” said King County Assessor John Wilson, who was elected in November and took over the office in January. The 2015 valuations were made under his predecessor, Lloyd Hara.
With about one-third of the 550,000 residential properties in King County now appraised, assessors say homeowners should expect another jump in valuations over 2015, with increases of about 10 percent in many sought-after areas.
North Beacon Hill posted some of the largest gains in Seattle, rising almost 15 percent in value. Property assessments went up 11 percent in the Ravenna/University District area and West Ballard, and 10 percent in Greenlake/Wallingford and parts of West Seattle.
Outside Seattle, assessments climbed 13 percent in Snoqualmie/North Bend, 12 percent on the Enumclaw Plateau, 11 percent in Shoreline and Kirkland, and 10 percent on Mercer Island.
The valuations reflect three years of market sale prices and the trend line of those sales for homes of similar size, construction quality and location, said Debra Prins, residential-division director of the Assessor’s Office. With the housing market active, she said, the office has many sales to use as comparables.
“I can’t believe people are going to be surprised by the new values, given what the market has been doing,” said Prins. “There’s limited inventory, there’s increasing population and the job market is strong. We’re hearing stories of sellers being offered $200,000 and $300,000 over the asking price.”
The 2016 assessed value is the basis for calculating 2017 property taxes. Those tax bills will be mailed Valentine’s Day. But that’s too late to file an appeal.
Homeowners have 60 days to contest their assessment, from the receipt of the new valuations, which are being mailed now through the end of August.
The Assessor’s Office also cautions that there isn’t a direct correlation between the percent increase in property value and the increase in taxes, though higher values do affect the total tax bill. Taxes are calculated by the county treasurers’ office and based on the taxes levied by dozens of different taxing districts including schools, ports, libraries, emergency-medical services and other special levies. A large percentage of the total tax bill comes through voter-approved measures.
Owners want fairness
The three Kirkland neighbors who compared their property values say they were less concerned about taxes than about the fairness of their assessments.
Joe Hauck, who lives in the largest of the three homes at 4,150 square feet, appealed his $1 million valuation, based on the $876,000 assessment of his neighbors, the Kloeppers. He also noted that another home in the subdivision sat on the market in 2015 with an asking price of about $850,000 and didn’t sell.
The Assessor’s Office said it doesn’t look at homes that don’t sell in drawing up their market analyses, just homes that do. And they don’t handle the appeals. Those go to the Board of Equalization, an independent, seven-member citizen body appointed by the county executive.
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In April, Hauck’s appeal was granted and his valuation reduced to $915,000.
But the Baneys, whose house is about 1,000 square feet smaller than the Haucks, lost their appeal of their $912,000 value, even though the third house, owned by the Kloeppers, had remained at $876,000 for two years.
“We presented our comps. They presented theirs. It felt like a predetermined outcome, like they (The Board of Equalization) were a rubber stamp for the appraisers,” Kevin Baney said.
Baney said he believed in the process. He appealed the Board of Equalization decision to the state Board of Tax Appeals.
After The Seattle Times inquired about the three properties and the difference in how they were treated, the Assessor’s Office reexamined their appraisal reports. They said the Baneys’ appeal to the state triggered their own review. Last week they decided the property was overvalued and reduced it to $882,000.
Prins said the review also brought to their attention that the Kloeppers’ house hadn’t increased in value since the couple successfully appealed in 2014. Prins said their 2015 value would be retroactively raised to $949,000, an increase of $73,000.
Asked if that was fair, since it was an error by the Assessor’s Office, Prins said it wasn’t an error in judgment; rather, the office failed to apply an annual adjustment in 2015 to the value, which is supposed to occur for all properties each year, based on market trends.
That outcome dismayed Hauck and Baney, who said their successful appeals shouldn’t penalize their neighbor.
“It’s insanity if after all this review they jacked it up for the Kloeppers. If they’re pegged at more than $910,000 to $915,000, it just proves how random and capricious this process is,” said Joe Hauck.
Ultimately, appraising is both an art and a science, Prins said. Appraisers use their experience and judgment. The office collects thousands of sales records and property characteristics and runs sophisticated computer analyses to determine value.
“Just because a house is bigger doesn’t necessarily mean more value. Buyers have preferences. Maybe they like the one on the end more than the one in the middle. Maybe they like the brick on the outside or the finished basement,” she said.
And if homeowners are dissatisfied, she said, they get a chance to appeal.