BENTONVILLE -- Benton County's recently finished countywide reappraisal shows most parcels increased in value, according to Assessor Roderick Grieve.
Each county is required by state law to complete a reappraisal every five years to adjust real-estate values to reflect current market conditions, according to a news release from the county.
An initial analysis of the numbers indicates substantial value growth in county real estate since the last reappraisal in 2016. That was expected, Grieve wrote in a summary to justices of the peace.
Washington and Sebastian counties did reappraisals in 2020. Crawford County did its last reappraisal in 2018.
Every real estate parcel is valued as of Jan. 1. The county sent out 155,750 real estate value change notifications beginning July 12, Grieve said.
Of that total, 137,388 parcels, or 88.2%, increased in value; 11,304 or 7.3%, decreased in value; and 7,058, or 4.5%, indicated no change in value, Grieve said.
There were 146,125 parcels in 2016, he said.
"This countywide reappraisal reflects current market conditions," Grieve said. "This will reflect what is currently going on in Benton County."
According to Grieve, total appraised value was just over $30.4 billion in 2021 compared to a little over $20.4 billion in 2016. Full assessed value was just over $6 billion in 2021 compared to a little over $4 billion in 2016. Taxable assessed value was $5.3 billion in 2021 compared to $3.8 billion in 2016.
The appraised or market value and full assessed value (20% of appraised value) follow the real-estate market and can increase at whatever rate the market indicates. The taxable assessed value -- the value that is multiplied by the millage rate to determine annual tax liability -- is subject to Amendment 79 limitations, Grieve said.
Amendment 79 of the state constitution limits how much a taxable assessed value can rise each year, according to the news release.
For example, even if a home's market value has doubled since the last value change in 2016, the taxable assessed value can increase by no more than 5% for a homestead property and 10% for a non-homestead property. This may limit the increase in property tax, according to the release.
Also, if residents have applied for the over the age of 65 or disabled freeze, their taxable assessed value is frozen and won't increase unless they have made substantial changes to their property since the last reappraisal.
Appraised value by property category in 2021 shows $22 billion in residential, $7.9 billion in commercial and $465.4 million in individual property -- all up compared to 2016.
About 20 appraisers reviewed more than 155,00 parcels since the last reappraisal in 2016, Grieve said. The county was sectioned off and appraisers took a section at a time to evaluate, he said.
Washington County
In Washington County, every real estate parcel was valued as of Jan. 1, 2020. The county distributed 100,203 real estate value change notifications beginning in July 2020, said Dan Cypert, chief deputy assessor.
Of that total, 86,470 parcels, or 86.3%, increased in value; 9,139 or 9.1%, decreased in value; and 4,594, or 4.6%, indicated no change in value, Cypert said.
There were 94,653 parcels in 2015.
Total appraised value was just over $25.5 billion in 2020 compared to a little over $17.9 billion in 2015. Full assessed value was just over $5.1 billion in 2020 compared to a little over $3.5 billion in 2015. Taxable assessed value was $4.4 billion in 2020 compared to $3.4 billion in 2015, Cypert said.
Appraised value by property category in 2020 shows $14.4 billion in residential, $6.1 billion in commercial and $452.7 million in individual property -- all up compared to 2015, Cypert said.
Washington County Assessor Russell Hill said property values in the county increased by about 48% from 2015 to 2020, a record rate of increase for the county, Hill said.
Hill said state law requires that if a county's rate of increase exceeds 25% from one reappraisal to the next, the county shifts from a normal five-year cycle to a three-year cycle, meaning Washington County will do another reappraisal in 2023.
Grieve said Benton County has not heard back from state officials on whether the county will switch to a three-year reappraisal cycle. That decision could come later this year, he said.
Hill said that in 2015, the real estate market was just starting to grow again after the recession of 2008.
"In 2015, we locked in values when the market was really low," Hill said. "When 2020 hit, it was right at the peak."
A hot market
Nicki Rogers, a Realtor with Lindsey & Associates, said several factors are driving the rush to purchase homes, including a cost of living that's lower here than in other parts of the country, a good quality of life in the area and a robust job market.
Covid-19 also has impacted the home-buying market, with new construction slowed by supply chain issues, she said.
Looking at four-bedroom homes within a price range of $300,000 to $450,000, at one point last month there were 106 active listings, 524 under contract and 873 that sold in the past six months in Benton County, Rogers said. There's about a one-month inventory in most price ranges except those above $600,000, because those homes tend to stay on the market a little longer, she said.
Rogers said she sold a four-bedroom, three-bathroom home in Bentonville for $340,000 on June 29, 2020. She recently relisted the home, which had no improvements, for $450,000 and it was under contract within three days for $470,000.
Carrie Perrien Smith, a Benton County justice of the peace from Rogers, said she sold a fully renovated luxury home in 2018 that today would go on the market for 25% more and would sell in half the time or maybe less.
"I don't think most homeowners watch the real estate market that close, so this year's assessment is a big surprise," she said. "Some homeowners only know because Realtors are knocking on doors begging people to put their house on the market because inventory is so low."
Housing affordability
The appraised value is market derived. Properties in appreciating market areas and neighborhoods may go up in appraised value, while other properties may stay at the same appraised value. Some may even decline in appraised value, depending on what the market data indicates for the specific neighborhood, according to the county's news release.
A property's value can change for many reasons, including a change in the property's physical characteristics or use; however, the most frequent cause is market conditions, according to the release.
Bill Burckart, owner of Burckart Construction and a Bentonville City Council member, said one future challenge will be the accessibility to housing at these prices. Northwest Arkansas will need an additional 80,000 households by 2040 if it continues to grow at its current rate, he said.
"A large part of our population and those moving here to work cannot or will not be able to afford a home," he said.
Solving that problem will require efforts from city and county leaders, he said.
"As our successes and opportunities continue, we must be vigilant and mindful of all our citizens and their ability to be included in these opportunities and housing," he said.
Property owners may appeal their property's value to the Benton County Board of Equalization if they don't agree with the appraised value of their property. The board is an independent and autonomous body consisting of nine Benton County property owners.
The Assessor's Office as of Friday had received 602 phone calls regarding the notices, which resulted in 476 informal reviews with an appraiser. Those resulted in 36 formal appeal hearings being scheduled, Grieve said.
Hearings start today at the Rogers Annex at 2111 W. Walnut St.