Increase is greater at the north end of the valley
By Alissa Johnson
The 2019 Gunnison County Assessor’s Report has been hitting local PO boxes, and residential property values have increased over the last two years. That increase is greater at the north end of the valley than in the Gunnison area and has been accompanied by a decrease in the state assessment rate used to calculate property taxes. However, it is too early to say how these changes will affect property taxes.
Property values are assessed every two years. According to information provided by the Gunnison County Assessor’s office, the 2019 valuation sent to property owners represents the “probable price [the] property would have sold for on June 30, 2018.”
For the 2019 reappraisal, the median value of single-family residences in Gunnison County rose from $315,000 in 2016 to $437,000 in 2018, excluding condominiums and manufactured housing. With condominiums and manufactured housing in the picture, the 2018 median sales price is $322,000. Drilling down, the increase is greater at the north end of the valley compared to the Gunnison area: the 2018 median sales price for single-family homes at the north end of the valley was $925,000 compared to $335,000 in the Gunnison area.
According to an email from county assessor Kristy McFarland, “Values have increased because sales prices have increased and buyers paid more for similar properties this reappraisal than in the previous reappraisal. To exacerbate this, the supply of properties in the moderate price level is running well below the level of demand, which is driving up prices even further. Sellers can charge more in a market with limited inventory.”
How much an individual property’s valuation changes will vary from property to property.
“Because the Assessor’s Office analyzes a completely new set of sales for each two-year reappraisal cycle, changes in valuation from one cycle to the next will vary from property to property based on (among other factors) the property’s size, location, quality, condition, age and type of use,” said senior analyst William Spicer.
In the town of Crested Butte, for example, the middle 50 percent of valuation changes for residential properties increased between 12 percent and 31 percent. In the Upper East River Valley (excluding the town of Crested Butte), the middle 50 percent of valuation changes for residential properties increased between 16 percent and 41 percent.
On the whole, valuation for vacant and commercial properties also increased. Across Gunnison County, the middle 50 percent of valuation changes for vacant properties ranged from -.5 percent to 21 percent. And for commercial properties, the middle 50 percent of valuation changes increased between 1 percent and 38 percent.
One implication of increased valuations is the impact on property taxes, which are calculated by multiplying the property value by the state assessment rate and mill levies set by taxing districts. This year, the residential state assessment rate was projected to drop from 7.2 percent to as low as 6.95 percent—the actual decrease wasn’t quite as big, however.
“Senate Bill 19-255 has passed out of the senate and house and is awaiting the governor’s signature. This bill lowers the residential assessment rate to 7.15 percent,” McFarland wrote. (The assessment rate for non-residential property will remain the same at 29 percent.)
It’s hard to know, however, if that decrease will offset the rise in property valuations when it comes to calculating property taxes.
“The various taxing authorities will decide on their budgets given the revenue in their district and set their mill levies accordingly,” McFarland said—to happen in December of this year. Once those mill levies are set, however, it is possible for property owners to estimate property taxes using the formula outlined above.
McFarland did note that one point of confusion often stems from how valuations are calculated. A technique called mass appraisal looks at property sales from a specified study period to analyze how location, size, construction quality, and access affect sales price.
For the 2019 reappraisal, Gunnison County assessments looked at two to three years’ worth of data for residential properties, five years for commercial properties, and two to five years for vacant land, depending on the amount of data available.
“People often ask,” McFarland wrote, “’Why are you comparing my property to houses that are much bigger, nicer, better maintained than mine?’ It is true that we analyze all sales of a particular type of property (e.g. residential) in a particular economic area (e.g. town of Crested Butte) together.
“We do this to understand exactly how factors like size, quality, condition, and location affect value. By doing this we are able to apply a valuation to each individual property that properly takes these factors into account. For example, a small, lower quality miner’s cabin in a less desirable neighborhood will end up being valued completely differently from a large luxury home in the best part of town.”
There is an appeals process for property owners who feel that the estimated value of their property is either inaccurate or unfair. It is outlined on the county website at https://www.gunnisoncounty.org/680/Appeals-Process.