Hundreds in Lynchburg appeal jump in home values

Jerome Dillard’s four-room home on Stratford Road is worth $64,500, says the city of Lynchburg.

That’s $10,000 more than it was worth two years ago, and more than twice what Dillard paid for it in 1990.

For people selling their homes, a jump in value like that is good news. For 70-year-old Dillard, though, it’s just a mystery.

“I don’t know how the devil they can go up on stuff like that when I’m not making no money to start with,” said Dillard.

His house is in the same boat as hundreds of other homes in Lynchburg: old, small and inexpensive, but rising faster in value than other homes.

The News & Advance examined the city’s data on the assessed value of single-family homes, and compared it to sales data on homes that sold in 2007 and 2008. The analysis showed that Lynchburg’s 2009 reassessment raised the values of small homes by a greater percentage than that of larger and new homes.

The value of single-family homes went up 6.5 percent on average. Homes valued at $100,000 or less rose 9.3 percent, while those costing more than $300,000 went up about 2.8 percent.

The value of small and older homes also rose more than average. Homes of fewer than 1,000 square feet rose more than 7 percent, and homes built before 1940 rose 6.7 percent on average.

A number of property owners have called the changes unfair, especially because the increase affected homes in low-income areas. Nearly 1,000 people have appealed the city’s decision on their homes’ values.

City Assessor Greg Daniels said the increased values are based on sales statistics. Since the 2007 reassessment, less-expensive homes sold for thousands of dollars more than the city previously said they were worth.

According to an analysis of sales data, homes valued at $100,000 or less sold for an average of nearly 12 percent over their assessed values, while those costing more than $300,000 sold for about 3.4 percent less than their assessed values, on average.

Daniels said he was surprised to see the trend, but that it probably reflects supply and demand factors in the Lynchburg housing market.

“Because of the price of land, there aren’t a lot of new homes being built in that (low) price range” except for condominiums or townhomes, Daniels said. “If you want to buy a house with a yard without a neighbor above or attached to you, you have to buy an existing house.”

And probably an older house, too. “Some people will buy a house that’s in bad condition, and then they spend a lot of money fixing it up,” which also raises the value of those homes, he said.

Daniels said the real estate market picks up in the spring, so new data over the next few months could indicate whether the city’s housing market is getting better or worse.

“I guess that’s the million dollar question that everybody can guess,” Daniels said. “… I think we’re at the bottom of the market, and I think we’ll know a lot in the next three to four months about what’s going to happen with values.”

The explanation about selling prices doesn’t satisfy some of the city’s property owners, however, because it doesn’t reflect how hard it is to sell a home.

Charlotte and Campbell Rees, who live in Forest but own several rental homes in Lynchburg, sold a house on Warren Avenue last summer for $149,000, according to city records. To fetch that price, they had to pay $4,000 in closing costs, Charlotte Rees said.

“They’re using that (price) to prop other houses on Warren, when really that’s not the real value,” Rees said. “The bank said it was, but no other house was that high.”

While they were trying to sell that home, real estate agents told them that homes under $100,000 were selling much faster. Rees said she thinks people were pulling their money out of the stock market and investing it in small homes, driving up demand and the price.

Daniels said property owners appealed the assessments for 998 residential properties by the April 3 deadline. Including commercial properties, 1,212 appeals were filed. The process of examining the appeals could take at least two weeks, he said.

On Stratford Road, Dillard said he did not appeal the assessment on his small house because it doesn’t immediately affect him. His mortgage company pays the real estate taxes on the house, which is in the Thomas Road area.

However, he said that the city should lower its real estate tax rate for the sake of others. The city’s tax rate currently is $1.05 per $100 of assessed value. Lowering it to 99.8 cents would keep the city’s revenue neutral.

“I don’t think it should be as high as it is,” Dillard said. “People in my shape that have to pay that tax, I don’t think it’s fair.”