OGDEN — The assessed market value of real estate in Weber County plummeted by more than $210 million in 2011, but the fall is relatively minor compared to the 2010 drop of almost $690 million, which could have mixed results on individual tax bills, according to a new report.
The release of the report comparing market conditions between 2010 and 2011, prepared by Weber County Assessor John Ulibarri, coincides with the mailing of about 93,000 assessment notices to Weber County property owners.
The decrease in market value could have a varying impact on property owners’ 2011 tax bills, said Ulibarri. Property owners could see their tax bills increase even if the property’s appraised value went down, he said.
For example, if the assessed value of a particular piece of property decreases by 2 percent but the average decrease in market value within the tax district is 4 percent, the propery owner will see a slight increase in property tax.
Another component determining a property owner’s “tax bill” is the budget of each taxing entity in their tax district.
Weber County property owners will have until Sept. 15 to file an appeal of their 2011 valuations. Hearings will then be scheduled by the Weber County Board of Equalization
Ulibarri’s report states that unemployment in Weber County that reached 8.2 percent in 2010 and poor economic conditions caused the residential real estate market to flounder.
“In addition, the share of distressed properties in the (county’s) inventory continues to grow, with a greater percentage of homes sold either as a short sale or in foreclosure,” the report indicates.
Statistics tracked by the Weber County Assessor’s Office indicate that only 65 percent of real estate sales in 2010 were “arm’s length transactions,” defined as transactions that occur under no duress by sellers and buyers, the report states.
“These distressed sales will continue to inhibit any market rebound until the distressed inventory is reduced back to historical levels,” says the report.
Rick Southwick, an associate broker with Keller Williams Success Realty in South Ogden, isn’t surprised that about 35 percent of real estate transactions in Weber County in 2010 were a result of short sales or foreclosures.
“That’s consistent with the economy and fallout of a sub-prime market,” he said. “Values are down and interest rates are low, which it makes a great time to buy. I’m surprised more aren’t out taking advantage of the market.”
Informal interviews with local real estate professionals indicate that up to 50 percent of the residential real estate transactions fell into the distressed category, Ulibarri said.
On the positive side, Utah hasn’t experienced overinflation in the real estate market like Nevada, Arizona and California, which means property didn’t appreciate as fast or lose value at the same rate as in some other markets, the report states.
As a result, the median sale price for residential real estate in Weber County in 2010 dropped only about 1 percent from 2009 and remained at slightly more than $150,000.
The report noted that while the decline in median sales price slowed in 2010, the loss in value measured by sales price per square foot accelerated, says the report.
“With the market in its current state, buyers are able to purchase more home for less money than they were before,” it states.
The decline in market value in 2010 was accompanied by a reduction of 16 percent fewer building permits for single-family homes and 8 percent fewer total residential permits than in 2009.
Market values were perceived to be declining in 2010 and new homes were selling at a dramatically slower rate than in prior years, creating an oversupply of new homes, the report says.
The report also says the oversupply has led builders to sell units for a discount or to allow homes to fall into distress, causing them to lose their appetite for speculative properties and contributing to a decline in building permits.
There are very few speculative homes being built in Weber County. Instead, new homes are being constructed for buyers under contract, Southwick said.
Looking ahead, Ulibarri said, it could be awhile before Weber County’s real estate market conditions significantly improve.
“It’s going to be a rough year this year and next year in terms of the real estate market, and it possibly may not rebound until the second quarter of 2013,” he said. “But I hope it comes back much sooner because that would mean an improvement in the overall Weber County economy.”