Assessed value of many homes being reduced

Tuesday, Jan. 9, 2007 | 7:13 a.m.

Prompted by falling home prices, the Clark County assessor's office has reduced the assessed value of some homes by more than 10 percent.

The reductions give dramatic evidence that a cycle of rapid appreciation has ended in the Las Vegas Valley. For much of the past decade, homeowners had seen property values jump double digits each year, including a nearly 40 percent jump in assessed valuations two years ago.

But the Greater Las Vegas Association of Realtors reported Monday that the median price of existing homes sold in December was down 2 percent from December 2005.

Of the 590,000 residential parcels in Clark County, the assessor's office said the property values of about 85,000 - 14 percent - have decreased. Of those, about 60,000 were reduced by an average of 5 percent and 25,000 were reduced by an average of 10 percent, county officials said. There were a few reductions as high as 30 percent, based on the recorded sale prices of homes.

But the affected homeowners can't expect a reduction in their property taxes. The taxes most homeowners pay are based on assessed values that were set in 2004 and which, by state law, were increased only by 3 percent annually - even though market prices appreciated significantly more.

Resale home prices in the region appreciated 39 percent in 2004 and 14 percent in 2005, according to Dennis Smith, president of Home Builders Research.

As a result, even though some homes' assessed values have now been lowered, their values remain well above the 2004-based assessed values - and the 3 percent annual increases - to which the taxes are fixed.

For the same reason, governments that benefit from property tax revenue will not see a reduction in their revenue as assessed valuations dip.

The lowering of the values by Clark County is the most tangible evidence to date that more homeowners are cutting prices to make a sale.

Even if current homeowners and governments that rely on property tax income won't be affected by the readjustments, buyers may be. Assessed valuations are used by appraisers in determining values of homes on the market, and the reductions may mean banks won't be willing to finance homes for what some buyers are seeking, said Richard Lee, vice president of First American Title.

The reduction in assessments has occurred throughout the Las Vegas Valley, including entire neighborhoods - such as one in Anthem in Henderson, where the assessed values of 176 homes were each slashed by $30,000.

Despite the declines in some neighborhoods, there are strong pockets in the valley where values are continuing to increase, said Jeff Payson, the county's manager of appraisal.

The reduction in assessments nowhere approaches some of the predictions of 20 percent to 30 percent some national analysts have forecast for Las Vegas. The Chicago Mercantile Exchange, which trades futures on housing prices, predicted Las Vegas will see its home prices fall 7.9 percent between August 2006 and August 2007.