Chesterfield property values expected to decline next year

This article originally appeared in the Chesterfield Observer, an RBS news partner.

Tax revenues in Chesterfield County are likely to continue declining next year because existing residential assessments are projected to drop 2 percent while commercial assessments fall another 8 percent.

That was the sobering news presented last week by Allan Carmody, the county’s budget and management director. Though Carmody said there are signs the “overall economy may have bottomed out,” the end of the recession locally doesn’t mean a return to growth. He predicted a “prolonged recovery,” creating “some significant program and service reductions” for the county government and the school system, which includes less funding from the state.

The major sources of revenue for the general fund (how the county pays for most of its services) are projected to decline for next year. Real estate taxes represent 46 percent of that funding while state and federal revenues (36 percent) are also being reduced. Sales tax revenue (7 percent) is coming back but still projected to be down 2 percent compared to increases averaging 5.5 percent before the recession.

As of last September, there were hopeful signs that a housing recovery was beginning because the price-points at which new home buyers enter the market were selling. “There was a dramatic surge in lower-end pricing,” said Carmody.

Homes selling under $100,000 jumped 80 percent while those from $100,000-$199,000 increased by 21 percent. But the other ranges – where most homes are priced – were off: $200,000-$299,000 (-12 percent); $300,000- $399,000 (-23 percent); $400,000-$499,000 (-15 percent); and $500,000-plus (-18 percent).

Last year, there were 684 new single-family homes built, but that represents a steady decline over the years from a peak of 2,553 in 2005.

Countywide, retail vacancy rates increased during the fourth quarter of 2009 compared to 2008. The major submarkets of Jefferson Davis Highway (13.2 percent vacant), Midlothian Village (12.5 percent).

Midlothian West (9 percent) and Swift Creek (8.3 percent) all increased. The Richmond metro rate of 9 percent also increased from 5.9 percent.

For office space in the fourth quarter, the vacancy rate for the 288 corridor increased to 12.6 percent from 10.9 percent, but the Midlothian corridor stayed flat at 14.2 percent. Chesterfield is faring much better than the Innsbrook area in Henrico County, which dramatically increased to 27 percent from 18 percent. In the Richmond metro, the office vacancy rate is 11.2 percent.

This article originally appeared in the Chesterfield Observer, an RBS news partner.

Tax revenues in Chesterfield County are likely to continue declining next year because existing residential assessments are projected to drop 2 percent while commercial assessments fall another 8 percent.

That was the sobering news presented last week by Allan Carmody, the county’s budget and management director. Though Carmody said there are signs the “overall economy may have bottomed out,” the end of the recession locally doesn’t mean a return to growth. He predicted a “prolonged recovery,” creating “some significant program and service reductions” for the county government and the school system, which includes less funding from the state.

The major sources of revenue for the general fund (how the county pays for most of its services) are projected to decline for next year. Real estate taxes represent 46 percent of that funding while state and federal revenues (36 percent) are also being reduced. Sales tax revenue (7 percent) is coming back but still projected to be down 2 percent compared to increases averaging 5.5 percent before the recession.

As of last September, there were hopeful signs that a housing recovery was beginning because the price-points at which new home buyers enter the market were selling. “There was a dramatic surge in lower-end pricing,” said Carmody.

Homes selling under $100,000 jumped 80 percent while those from $100,000-$199,000 increased by 21 percent. But the other ranges – where most homes are priced – were off: $200,000-$299,000 (-12 percent); $300,000- $399,000 (-23 percent); $400,000-$499,000 (-15 percent); and $500,000-plus (-18 percent).

Last year, there were 684 new single-family homes built, but that represents a steady decline over the years from a peak of 2,553 in 2005.

Countywide, retail vacancy rates increased during the fourth quarter of 2009 compared to 2008. The major submarkets of Jefferson Davis Highway (13.2 percent vacant), Midlothian Village (12.5 percent).

Midlothian West (9 percent) and Swift Creek (8.3 percent) all increased. The Richmond metro rate of 9 percent also increased from 5.9 percent.

For office space in the fourth quarter, the vacancy rate for the 288 corridor increased to 12.6 percent from 10.9 percent, but the Midlothian corridor stayed flat at 14.2 percent. Chesterfield is faring much better than the Innsbrook area in Henrico County, which dramatically increased to 27 percent from 18 percent. In the Richmond metro, the office vacancy rate is 11.2 percent.

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james
james
12 years ago

This is all the more reason to not raise taxes and have the county begin to learn to live within its means. Revenues are not going to come back to pre 2005 levels. Home values are declining, and raising the real estate tax to match current revenue simply means charging the same for less home — a tax increase any way you look at it. Time to start building smaller budgets and cutting what isn’t needed. Chesterfield got fat and happy with revenue increases for years because growth was healthy. But now growth is on the decline and the county… Read more »

Blackbeered
Blackbeered
12 years ago

Chesterfield has been “cooking the books” on real estate assessments since the beginning of the recession in 2007. The cumulative decline in assessments for ’08-’10 is approximately one-third of the real decline in “market value”. If the market ever “unseizes”, instead of the few dozen transactions the County dubs “abnormalities”, we’ll see hundreds of transactions substantially [20-30%] below the County’s figures which should drag down assessments for the next three-to-five years. Let’s face it, the Board allowed the CA to balloon government spending from 2000-2007 while they fed off reckless growth and “cooked” assessments. Now it’s time to suffer the… Read more »