VIRGINIA BEACH
Home values, weakened by a deluge of foreclosure sales, dipped 3.3 percent, marking a third straight year of decline and punching a hole in the city budget.
The drop means many people will see lower tax bills if the City Council does not change the tax rate. However, many tax bills could be virtually unchanged: Average assessments in one-third of the city's more than 980 neighborhoods stayed flat.
Foreclosures have dogged the region's housing market. Of the 5,700 Beach home sales last year, 1,112 were foreclosure sales - about one in five.
City Assessor Jerry Banagan, who presented his annual report to the City Council on Tuesday, said he was optimistic about homes holding their value.
"The area has fared fairly well," he said. "I think maybe the worst is over, but foreclosures are alive and well."
Falling assessments mean the city could collect $12.3 million less in revenue compared with last year if the standard tax rate, currently 89 cents per $100 of assessed value, stays the same. That's about half the $24 million shortfall city officials say they're facing as they work on the budget for the fiscal year starting in July.
City Manager Jim Spore said the city has been able to absorb revenue losses from falling assessments without reducing major services for two years in a row, but that a third year might be tough.
"The cost of services is not going down," he said. "One or two years, you can get by, but you can't do it indefinitely."
Spore recommended a 3 -cent real estate tax rate increase last year, but the City Council rejected it. He presents his budget to the council next month.
The continued slide is in marked contrast to fiscal years 2005- 0 8, which saw double-digit assessment increases in the Beach that topped out at 22 percent in 2006. Last year, city property values fell 6.2 percent.
This year, some home values fell as much 37 percent, while some increased by as much as 9.7 percent.
If the owner of a $250,000 home saw a 3.3 percent assessment decrease, it would shave roughly $73 off the yearly tax bill, to about $2,152.
Property values in the Lynnhaven district fell 4.7 percent, the largest decrease of the city's seven political subdivisions. Commercial and industrial property rose in value by an average of 0.92 percent.
The overall decrease for properties was 2.9 percent.
About 63 percent of all properties will see assessments decrease, 31 percent will stay the same and 6 percent will see an increase, Banagan's report said.
Assessment notices for the fiscal year starting in July will be mailed Friday.
Property values for the city were pegged at nearly $50.5 billion. That would generate $449.5 million in city real estate taxes if the tax rate is left unchanged. Last year, the city brought in $461.8 million in real estate taxes.
Home values, weakened by a deluge of foreclosure sales, dipped 3.3 percent, marking a third straight year of decline and punching a hole in the city budget.
The drop means many people will see lower tax bills if the City Council does not change the tax rate. However, many tax bills could be virtually unchanged: Average assessments in one-third of the city's more than 980 neighborhoods stayed flat.
Foreclosures have dogged the region's housing market. Of the 5,700 Beach home sales last year, 1,112 were foreclosure sales - about one in five.
City Assessor Jerry Banagan, who presented his annual report to the City Council on Tuesday, said he was optimistic about homes holding their value.
"The area has fared fairly well," he said. "I think maybe the worst is over, but foreclosures are alive and well."
Falling assessments mean the city could collect $12.3 million less in revenue compared with last year if the standard tax rate, currently 89 cents per $100 of assessed value, stays the same. That's about half the $24 million shortfall city officials say they're facing as they work on the budget for the fiscal year starting in July.
City Manager Jim Spore said the city has been able to absorb revenue losses from falling assessments without reducing major services for two years in a row, but that a third year might be tough.
"The cost of services is not going down," he said. "One or two years, you can get by, but you can't do it indefinitely."
Spore recommended a 3 -cent real estate tax rate increase last year, but the City Council rejected it. He presents his budget to the council next month.
The continued slide is in marked contrast to fiscal years 2005- 0 8, which saw double-digit assessment increases in the Beach that topped out at 22 percent in 2006. Last year, city property values fell 6.2 percent.
This year, some home values fell as much 37 percent, while some increased by as much as 9.7 percent.
If the owner of a $250,000 home saw a 3.3 percent assessment decrease, it would shave roughly $73 off the yearly tax bill, to about $2,152.
Property values in the Lynnhaven district fell 4.7 percent, the largest decrease of the city's seven political subdivisions. Commercial and industrial property rose in value by an average of 0.92 percent.
The overall decrease for properties was 2.9 percent.
About 63 percent of all properties will see assessments decrease, 31 percent will stay the same and 6 percent will see an increase, Banagan's report said.
Assessment notices for the fiscal year starting in July will be mailed Friday.
Property values for the city were pegged at nearly $50.5 billion. That would generate $449.5 million in city real estate taxes if the tax rate is left unchanged. Last year, the city brought in $461.8 million in real estate taxes.
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