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Local Property Values Still Climbing
The value of property in the Fairbanks area continued to climb last year, according to property appraisers, the Fairbanks North Star Borough Assessing Department, and figures from real estate agents.
Some of the biggest jumps in residential property assessments were seen in North Pole, Ester and the Farmers Loop area, borough assessor Pat Carlson said. Asking and selling prices for commercial and industrial property south of Fairbanks and the retail area near the Johansen and Steese expressways also rose, commercial real estate agent Jim Desmond said.
Overall, assessed values and sales prices continue to rise at a “healthy, steady pace,” following a trend seen around the state for more than a decade, deputy borough assessor Karl McManus said.
While the level of commercial construction projects has dipped from the record levels experienced a few years ago, there has still been enough activity that commercial appraiser Roger Nash expects commercial values to stay high for the foreseeable future. Nash said that enough commercially suited land around Fairbanks was gobbled up during the recent construction boom to decrease supply and guarantee higher selling prices for available, commercially zoned land.
“We’re plodding along at a pretty steady beat, and without a lot of outside stimulus,” Nash said of the commercial market.
Based on real estate agents’ reports to the Greater Fairbanks Board of Realtors, the average selling price for a single-family home rose by 8 percent to $212,000 last year. That increase — taken from the average of more than 1,000 home sales reported in 2006 — closely follows a trend: the average selling price for single-family homes has risen 53 percent since 1999, the board reported. For tri-plexes and four-plexes, the average selling price has risen by 63 percent over the same stretch.
Larger apartment buildings drew higher assessments this year after the Assessing Department collected data that showed an increase in area rental prices in recent years, McManus said. A look at the 2007 assessment roll showed the assessed values for the Willow Wood Apartments, Sophie Plaza Apartments and Jillian Square Apartments each rose by more than 14 percent.
While they acknowledged the borough’s overall assessment roll grew in size last year, Carlson and McManus said the assessing office won’t compile an estimate of the aggregate value of assessed land in the borough for a couple of months. The assessment roll, they noted, won’t be certified until late spring.
While rising values might be a welcome sight for those looking to sell land, they also translate to higher property tax bills.
That doesn’t please residents like Frank E. Baker, who has watched assessors’ estimated market value of his northeast Fairbanks home rise by an average of 12 percent a year over the past five years despite what he described as only “relatively minor” improvements to his property over that time.
“I don’t want to sell,” Baker said.
He said rising property values and taxes will discourage people from moving to Fairbanks and buying a house. “We want this to be a community people can come up (to) and enjoy and afford.”
The exact tax implications of increased 2007 assessments won’t be known until the Borough Assembly sets a property tax rate this summer. Under last year’s tax structure, a home assessed at $200,000 inside the city faced a combined city-borough tax of $3,925.
Last year’s rise in interest rates hasn’t done much to cool Alaska’s strong housing market, said Jonathan King, an economist at Anchorage-based Northern Economics.
Low interest rates and creative financing options in recent years have placed more people in homes and shrunk the pool of potential new home owners, King said. But that hasn’t curbed the strong demand for residential property, which continues to be at least partially driven by low rates, he said.
“Interest rates are up, but they’re still certainly below their long-term historical average,” King said.
Aside from increased assessed values in Ester, North Pole and the Farmers Loop area, residential property along the Chena River and near Harding Lake also rose notably in assessed value, Carlson said.
“Those were the areas we saw the biggest inequity between selling prices (and past assessments),” Carlson said.
Copyright 2007
Fairbanks Daily News Miner
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