Kootenai property values fall

While official figures for last year won’t be out until next week, the overall taxable value of property in Kootenai County is expected to have fallen by about $500 million, Assessor Mike McDowell said Thursday. “We’ve never seen that before,” McDowell said during a news conference to announce that the county mailed 84,783 assessment notices that reflect property values as of Jan. 1.

Kootenai County is experiencing a “much softer landing” than the national real estate market, where home values are decreasing dramatically, he said.

“There’s still a lot of (market) demand, but we are seeing a correction,” McDowell said.

In Bonner County, another resort area that experienced soaring real estate prices in the past few years, property values are expected to stay roughly the same, with perhaps about 20 percent of the properties showing an increase in value, Assessor Jerry Clemons said. Bonner County will mail its assessment notices Monday.

Across the border, Spokane County has avoided falling values. Assessment notices will be sent today, said Assessor Ralph Baker. The total property value in Spokane County increased by 5.3 percent. That compares with valuation increases of more than 12 percent in the past three years.

“We’re seeing fewer sales, but prices are still rising, albeit slower,” Baker said. “The happy thing is that it hasn’t gone negative on us.”

Residences, especially those within city limits, account for the bulk of the decline in Kootenai County, which is estimated between 5 percent and 10 percent. Commercial properties continue to show gains – a typical trend where business development follows home construction, McDowell said.

Even though the average home value is decreasing there is still strong residential construction, with an estimated 1,300 new homes constructed in the county last year. That’s down from the peak several years ago of 2,600 new residences.

The home value decrease follows a three-year bubble in which real estate prices soared and taxable values increased by 45 percent in 2006. Last year the overall increase was 14 percent.

The gains sparked an outcry from taxpayers and record-breaking numbers of appeals. The Idaho Legislature reacted by raising the homeowner’s exemption from property taxes for the first time since 1982 and approving a tax shift. Lawmakers raised the sales tax to 6 percent and trimmed $260 million in property taxes for all types of property owners, including homeowners, businesses, farms and utilities.

The increase in the exemption is giving homeowners a $100,938 break this year. For example, a homeowner whose house is valued at $200,000 would pay taxes on just $99,062 of the value.

Combined, these measures helped reduce some property owners’ tax bills even as their property values went up. Some county officials and residents continue to lobby the Legislature for even more tax reform.

As the county’s total taxable value decreases, levy rates are expected to increase. How much largely depends on whether various taxing districts in the county, from North Idaho College to the highway districts, increase their budgets. Yet that doesn’t necessarily result in a higher tax bill for property owners in November.

“That’s why people should get involved and attend the budget hearings,” Chief Deputy Assessor Rich Houser said. “People can have an impact on the amount of taxes they pay.”

The dates and times of the budget hearings are included on each property owner’s assessment notice.

In 2007, the net taxable value of Kootenai County real estate totaled $16.5 billion, which was an increase of 14 percent over 2006. This year McDowell estimates the total closer to $16 billion.

The county hasn’t yet released specific numbers because it is double-checking the calculations to prevent a repeat of a recently discovered mistake that resulted in property owners being under-billed $1.4 million in 2006.

The official numbers are expected next week.

McDowell predicts that the average taxable value of residential homes is down between 2 percent and 5 percent, depending on the location. Overall, the homes in the Coeur d’Alene and Post Falls area likely will have an average decrease of about 5 percent while the average decrease in the Hayden, Rathdrum and Spirit Lake areas is expected to be 3 percent. The west side of Lake Coeur d’Alene, including the Mica area, should expect an average 2 percent decrease.

The place where the average value of homes in expected to increase perhaps 2 percent is around the east side of Lake Coeur d’Alene. Houser said that increase is largely attributed to new luxury homes in the private Gozzer Ranch golf retreat that just went on the tax rolls.

It’s not yet possible to pinpoint waterfront home values, which in past years increased an average of 40 percent and in some cases doubled, McDowell said.

Idaho property owners have until June 23 to appeal.