Monday, April 4, 2011

Daviess property values rise by $95 million

By Keith Lawrence, Messenger-Inquirer
Published: Sunday, April 3, 2011 12:28 AM CDT
After dropping $4 million in 2009, the value of Owensboro property jumped $95 million in 2010 to a total of $4.64 billion, Sandy Dawdy, Daviess County property valuation administrator, said recently.

That comes at a time when Zillow Real Estate Market Reports estimates that retail property alone in the United States lost $1.7 trillion of its value in 2010.

In Daviess County, Dawdy said, the value of residential property rose $58 million; commercial property, $30.1 million; and farmland, $6.5 million.

In 2009, residential assessments grew by $18 million to $3.15 billion and farm assessments by $5 million to $312 million.

But commercial property values dropped by $27 million to $1.2 billion.

Dawdy said the loss of the Executive Inn Rivermont removed $5 million from commercial rolls in 2009 and several commercial properties sold for less than their assessed values.

She couldn't pinpoint exactly why the commercial market rebounded in 2010.

But Bo Barron, managing director of Sperry Van Ness/The Barron Group and that company's local asset recovery representative in western Kentucky, said what's happening in Owensboro is part of a national trend.

In 2007, commercial property sales across the country totaled $500 billion, he said.

That dropped to $150 billion in 2008 and $50 billion in 2009 before rebounding to $100 billion last year.

"That felt great," Barron said. "The first half of last year was so slow, we might as well have been on vacation. But the second half turned around and made 2010 the best year I've ever had."

Investors are wanting to buy again, he said.

"We had multiple offers on a piece of commercial property last week," Barron said. "That never happens in Owensboro."

The slowdown in homebuilding, he said, has created a tight market for apartment rentals and investors are wanting rental property again.

"There's still a glut of good retail space," Barron said. "But national retailers should be ready to engage again in the second half of the year."

"Property is just selling for more," Dawdy said. "We haven't raised assessments that much."

For residential property, the increase is partly because more houses were built in 2010 and partly because home sales were also up.

The Owensboro Metropolitan Planning Commission issued permits last year for 292 single-family homes valued at $25.3 million along with 93 apartment units valued at $3.44 million and two duplexes valued at $220,592.

That's a total of $28.96 million.

In 2009, the planning commission reported permits for 282 single-family homes worth $22.29 million.

Planning commission records show 44 commercial projects valued at $62.4 million last year, up from $42.27 million in 2009.

But some of that -- such as the new hospital and riverfront construction -- is from governmental or other nonprofit agencies and won't go on the tax rolls.

Jim DeMaio, president of the Greater Owensboro Realtor Association, said, "2010 was an outstanding year."

During the year, he said, home sales were up 2.5 percent to 931.

The median price of homes sold was up 6.1 percent to $112,000.

And total home sales were up 6.2 percent to $119.5 million.

"2006 was the height of the market," DeMaio said. "I don't want to say we were ever in a bad market in Owensboro. They weren't horrible years, but they weren't as good as the first half of the decade. But 2010 gives us a very positive outlook. The gloom and doom of the national market hasn't affected Owensboro."

DeMaio said while the Owensboro economy has seen layoffs and business closings, its main employers -- Owensboro Medical Health System, the two public school systems and U.S. Bank Home Mortgage -- either expanded or held steady during the recession.

The increase in property values means more money for schools and governments that depend on the property tax for a large portion of their revenues.

Twenty-five percent of Daviess Fiscal Court's budget comes from taxes on real property, as does 20.75 percent of Owensboro's.

For Daviess Fiscal Court, the increase in values will mean an extra $129,000 this year, according to Jim Hendrix, Daviess County treasurer.

Jim Tony Fulkerson, the city's finance director, said the city had $23.4 million worth of new property in 2010 and $20.1 million worth of increased value of existing property for a total increase of $43.5 million.

Taxes on that increase will generate $112,715, he said.

The increases are good news for Daviess County Judge-Executive Al Mattingly, who is busy preparing his first budget for the county.

"We're going to have to supplement the jail more than we did last year, so we can use it," Mattingly said. "It surprises me though. I didn't realize property values would be up that much. I thought things were still pretty slow."

Most of the increases, Dawdy said, were in higher sales of property and new construction.

About 5,000 properties saw increases in their assessments last year, she said.

But roughly the same number saw increases in 2009, Dawdy said.

"It has to be higher sales prices on property," she said.

But last year's growth -- roughly 2 percent -- was still well below the 2008 growth rate of 5.49 percent.