Under Fire From Above and Below: An Interview With the City Assessor

By STEPHEN SIEGEL
Falls Church Times Staff

July 25, 2011

It’s been a challenging year for Ryan Davis, Falls Church City’s real estate assessor. He’s used to criticism — it comes with the job, he says — but this year, he’s getting more of it than usual.

Part of the reason for the torrent of objections is the rising tax rate in the City, over which Mr. Davis has no control. That causes property taxes to rise, absent a decrease in property values, and encourages residents to suggest that their assessments should be lower.

But while residents complain about over-assessing, at least one influential figure in town contends that Mr. Davis is under-assessing properties — and insisting they should be higher.

That figure is Nicholas Benton, publisher of the Falls Church News-Press, who wrote recently that assessments are, in many cases, far too low.

The criticism came as something of a surprise to Mr. Davis, who defends his and his department’s work while also acknowledging that assessments aren’t a guarantee of value or an incontrovertible fact. “They’re an opinion of value,” he says modestly.

But the validity of his opinion has been given some extra credibility by an independent state board, which has found that the city assessments have been more accurate than 99% of the Virginia jurisdictions for the last seven years, Mr. Davis said.

“We do make mistakes, but we do a really good job,” said Mr. Davis during a wide-ranging interview at City Hall about the assessment process.

And critics make mistakes, too: Mr. Benton’s complaint about assessments being too low included several poor choices. For example, the biggest error he alleged was for a house assessed at $652,600, which then sold for more than double that figure last year at $1,356,500.

The reason for that huge discrepancy was that a developer bought an older, smaller house, tore it down, and built a brand new bigger house that is worth a lot more. The new house on the lot, at 609 Highland, is now assessed at $1,232,300.

That said, some assessments do seem too low: 912 Lincoln was assessed at $900,000 when it sold for $1,045,000 in 2010. But that home has now been assessed at $1,030,000, close to its selling price.
At the same time, some homes are selling below their assessed values: 707 Villa Ridge closed last month for $1,300,000, more than $70,000 below the amount for which it is assessed. Likewise, 207 Van Buren closed at $790,000 recently, more than $116,000 below its $906,000 assessed value.

In many cases, assessments may be below actual selling prices because sellers have made improvements to the homes before putting them on the market — improvements of which Mr. Davis and his department are not aware.

For example, another one of Mr. Benton’s complaints is that 1202 Seaton sold in November for $890,000 while it was assessed at just $681,600. But the sale listing shows architect’s plans drawn in 2010 and highlights an expansion containing a master suite with skylights and four updated baths, improvements which could sharply increase the property’s appeal beyond Mr. Davis’ knowledge.

Likewise, 907 Madison, which sold for $739,000 in December, was only assessed at $613,000 at the time. But the sale listing mentions three renovated bathrooms and new oak flooring.

It is unclear why homes might sell for well below their assessed value, but the most likely reason is that their condition is weaker than Mr. Davis could guess without having gone into the property.

The assessment process Mr. Davis uses is complicated, combining selling prices, average selling prices in a particular neighborhood, as well as walks around the city to look for improvements and a reading of real estate advertisements, also in an attempt to see if additions or improvements have been made. But some of that can be hard to quantify, unless residents let the assessor in the door when he knocks, as he sometimes does.

An analysis of selling prices by Mr. Davis has shown that Broadmont is the city’s most expensive neighborhood, even when the house in question is comparable to one in another neighborhood. In other words, buyers will pay more for an equivalent house in Broadmont. So the assessment calculation factors that in.

Likewise, Mr. Davis says his analysis shows that a busy street does not negatively affect a home’s value here (although it may in other jurisdictions), so when homeowners challenge their assessment by suggesting they are on a busy street, he says no.

To the extent that some houses are assessed too low, it could be a product of the City’s strong real estate market. While housing markets around the country continue to languish, the City market is showing impressive demand, with 10 homes selling in 10 days or less just since June 1. That could push up prices, leaving Mr. Davis’ calculations, which are based on the previous year’s sales, looking too low.

Asked about that possibility, Mr. Davis shrugs and falls back on his humble view that they’re just an opinion. But he does allow that they’re well within the 10% margin allowed by Virginia law.