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Two veteran real estate brokers from the area recently took some time to share their analysis of the assessed value of real property in Southampton County that, in some cases, has increased dramatically with the recent reassessment.

REACTIONS TO THE BIG INCREASES

Darren Stauffer, broker/owner of Franklin-based Century 21 Gold Market Realty, has 28 years of experience in real estate sales.

He said the massive increases in assessed value in the county were no surprise to him.

“My wife and I have some property in Southampton County, and we experienced the same thing, we’re in the same boat,” he said. “But, again, there’s no surprise. Assessments are done by mass appraisal, so they’re not always as accurate as someone would think they would be.”

Darlene Smithwick, broker/owner of Franklin-based Hometown Realty, has been in real estate for 28 years, and in reaction to the massive increases in assessed value in the county, she said she was “a little shocked, but not surprised. Being that the county reassesses every six years, a lot changes in six years, market value-wise. Prices go up a lot.”

She noted that in Franklin, real property value is assessed every two years.

“Our assessments go up probably 14% to 20% each time in what I have seen,” she said. “I know the houses in the county are going to appreciate, but they appreciate a lot in six years, but personally I don’t think it’s as much as the ones that I have talked to. Some have doubled, which is ridiculous.”

Stauffer noted that the state indicates that any type of tax assessment has to be revenue neutral. 

“I know there’s a small percentage there, a little bit of leeway, but pretty much it has to be revenue neutral, so if they want to capture that increase in taxes that are caused by a raised assessment, they have to hold a public hearing and go through the whole process to capture that,” he said. “The other side of that is they have to have a public hearing and reduce the tax rate to keep it revenue neutral.”

Southampton County Board of Supervisors Chairman Dr. Alan W. Edwards said in February that he guarantees the board will be decreasing the real estate tax rate later this year.

Stauffer explained the option that is available to county residents who have an issue with their real property value reassessment.

“So you have an opportunity, and if you’re a citizen, just like I am, that owns property in the county, if you disagree with that new assessment that’s coming out, then your avenue is to go to the Board of Equalization and go in there armed with some comparable sales and things to prove your point that, ‘Wait a minute, you’re stating that my property is worth X? I believe it’s worth Y, and here’s the reason,’ and get that assessment reduced,” he said. “Because, again, mass appraisals can be erroneous because they’re not looking at each individual property. They’re lumping your property together with like-kind properties to come up with that value.”

Joseph Stewart, of Newsoms, spoke during the Citizens Comment Period of the Feb. 27 Southampton County Board of Supervisors meeting, and he listed a variety of significant assessed value increases. One of them was in reference to an undeveloped two-acre property that he owns that jumped from $8,700 to $32,800.

“So we go up four times?” he asked. “Nothing’s changed there. There’s actually less trees; I cut a few trees down, and there’s piles of wood there…”

When told about Stewart’s situation with the two-acre parcel, Smithwick said he probably could sell it for more than $32,000.

“So you actually look at the market value,” she said. “What it could sell for is what I look at when I look at the assessments. Some assessments were very low six years ago.”

OPINIONS ON THE CAUSE OF THE BIG INCREASE

Stauffer said, “As far as the reason that I see it, well, just look at our economy, the inflation that’s been caused in the last couple years by actions that the administration in Washington, D.C., has taken. That has caused inflation nationwide, and of course, when building materials skyrocket and go up in price, that’s directly passed on to us, the end consumer, that are going to buy that house that is being built.

“And then add the fact that we have low inventory, you have more people chasing that same product, and they’re going to be willing to pay more for it because they want it,” he added. “But that’s kind of the crux to the issue there, how I see it.”

He also highlighted how interest rates have been impacted by what the overall economy is doing.

“The interest rates have ticked up, so all of a sudden you’ve priced some buyers out of the market,” he said. “You don’t have as many buyers in the market, but the ones that are here are chasing those fewer properties.”

Smithwick noted public perception of the significant increases in assessed value within Southampton would be different if the county did reassessments more often.

“(The) market has gone up a lot in six years,” she said. “If they assessed every two or three years, they would not have all the issues that they’re having this year with the public complaining. Everybody I’ve talked to in the county has complained about their reassessment.

“But then sometimes, they’ll tell me what it is, and I’ll say, ‘Well, do you think you could sell your house for that?’” Smithwick continued. “Some can. Some were like, ‘Yeah, they can buy it right now if they want to,’ because some houses that I know of have jumped $300,000, and that’s ridiculous. That’s just unheard of in my opinion.”

But she said that if the county reassessed every two or three years and real property values went up 15% to 20% like most of them in the city do, it would not be as big a shock.

“Last year when I got my reassessment,” she said, “I had a neighbor say, ‘Are you going to complain?’ No, because if I turn around and sell my house, I would have to get that or more. That’s the way I look at it.”

OPINIONS ON THE BIG INCREASE’S MARKET IMPACT

Smithwick said, “The county is just now catching up with the actual market values in some houses, but like I said, some are just outrageous. … The assessments really need to be up to date to be a fair tax for everyone in the county.”

She said she has looked up a few value assessments that people have complained about.

“They have gone up a lot, but some that is their value, and some it’s just way too much,” she said.

Stauffer indicated that he thinks some features of the market will remain as they are for a little while.

“Interest rates being 6% and 7%, that seems high when we came off of something (where) they were almost 0, down to 2% and 3%, but I’ve been in this business long enough and I’m old enough to remember when interest rates were over 12%, 13%,” he said.

He noted that years ago, he and his wife experienced high rates like that early on in their marriage.

“We had a property that we had financed, and it was around 13% interest, and when the rates went down to 10%, we were scrambling to refinance,” he said. “‘Let’s get that 10%! That’s a cheap interest rate!’ So it’s all relative to what the market, the overall economy is doing.”

He said, “Right now, there’s folks that are in their homes they’ve bought over the last few years when interest rates were very reasonable, and all of a sudden they’re faced with the decision — do I want to sell my current residence?”

He indicated that for those who need to replace the property they sold with another one, they are facing the prospect of paying more for it.

“If I’m going to replace it, I’m going to pay more for it, so I’m not really coming out ahead,” he said. “I’m going to pay more for it, I’m going to have a higher interest rate and a higher payment, so is that really something that I want to do? And I think that’s feeding our low inventory as well, because people are just opting to stay put.”