Homeowners in Scott County are being mailed notice of the once-every-two-year assessment of their property value, and some are experiencing sticker shock.
County and city assessors follow home sales in the local real estate market to determine property values. And sale prices over the last two years are pushing many up — way up.
“Unprecedented” is how Scott County Assessor Tom McManus described it: “Unprecedented increases in real estate values in the last two to three years.”
County assessment notices are in the mail, and more are going out to meet the April 1 deadline. Davenport will mail all of its assessments too by Friday. They do not include property tax calculations, which are set by state and local governments.
On average, residential properties have increased in value by 20% in Scott County over the past two years, McManus said.
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The percentage does not include Davenport, which is assessed separately. Property value assessments in the City of Davenport had to be raised on average 15-20% to meet the market value, City Assessor Nick Van Camp said.
The value increases follow a trend of a hot real estate market statewide and across the country, following the pandemic.
Van Camp pointed to low interest rates in 2020 and 2021, plus high demand and low supply of housing stock. Local realtors reported bidding wars, waiving inspections, and quick turnarounds.
“We’re reacting to what the market did for 2022,” Van Camp said.
Chris Conover and his wife bought their home in LeClaire in January 2022 for $370,000, about $7,000 less than what it was valued.
Conover said they expected some increase in valuation from watching the real estate market but were shocked to see it valued at $503,000 — a 33% increase. None of the increase is attributable to major improvements, either, such as a new garage or roof replacement.
“It was alarming,” Conover said. “We feel like we have a nice home, but we don’t think that it would sell on the market for $500,000.”
Conover plans to file an informal appeal with the assessor’s office.
He’s in a private Facebook group with other LeClaire residents. In it, a post about property assessments drew more than 100 comments from neighbors with similar assessments, along with advice on contacting the assessor’s office and information about the assessment process.
One poster, Conover said, told the group their assessment had gone up 47% by their calculation.
How are properties assessed?
All sale prices in Scott County are reported either to Scott County or the City of Davenport assessors offices, which then are used to reassess property values each odd-numbered year.
Assessors must assess property values by one of several property classes: agricultural land, agricultural dwelling, residential, residential multi-family, commercial, and industrial.
Each property’s newly assessed value varies, based on a ratio of 2022 sale prices compared to the 2021 assessed values of similar properties in a close area. The assessor uses the median ratio to adjust those values.
“We trail the market, we don’t set it, and we don’t forecast it,” McManus said. “The assessment always trails the market.”
“If we’re over-assessed, we need to bring values down,” McManus added. “If we’re under-assessed, we need to bring values up. Law mandates every two years in the state of Iowa, we have to do this.”
In Scott County, the average percent change by property classes were:
- Agricultural land: 35%
- Agricultural dwelling: 16.1%
- Residential: 20.3%
- Multi-family: 19.7%
- Commercial: 26.3%
- Industrial: 28.8%
“I don’t know what drives buyers and sellers; that’s not my business. All I have to do is get those sale prices,” McManus said. “But with COVID, we thought the (residential real estate) market would go flat, and we were all wrong. It skyrocketed. So, whatever reason — whatever COVID did and whatever low mortgage rates did and whatever the economy was doing. It was the perfect real estate market.”
It’s not yet clear what the precise statewide figures are, said Iowa State Association of Assessors President Paul Overton. But based on a survey of counties in the fall, he said, he expected an average between 20 to 25% increase on residential property assessments statewide.
“Those numbers are strong, if not stronger now,” Overton said. In Boone County, where he’s the county assessor, he’s adjusting values by an average of 30%.
The only comparable time period he could find, he said, was in the late 70s, when property assessments in the City of Boone increased by more than 35%.
How will assessment impact my tax bill?
McManus is quick to point out that county residents’ taxes will not go up by the same percentage as their property assessment.
Iowa code limits statewide taxable valuation growth to a 3% increase each year. In order to do that, the state calculates what is called a rollback percentage so that not all of a property’s value is taxable.
For example, this year’s rollback calculated that 54.65% of a residential property’s value could be taxed. But county officials predict with a statewide jump in property values, the rollback will likely dip to a much lower percentage next fall.
There are also tax credits and exemptions that may lower a tax bill.
The county assessor doesn’t set property tax rates — those are decided by local elected officials in the county, city, and schools.
Assessments residents currently are seeing won’t impact their tax bills until September of 2024 and March of 2025 when property taxes are paid.
Owners who complete new construction or remodeling would not be subject to the rollback percentage and would see a greater increase in property value.
How can I contest assessment?
McManus and Van Camp encourage property owners to first call the Assessor’s Office with questions and concerns.
If that doesn’t resolve matters, they may request an informal assessment review by the assessor’s office between April 2 and April 25. With that, they can schedule inspections with appraisal staff, provide recent appraisals, offer proof of inaccurate data, and other reasons they think the assessed value is inaccurate.
The next course of action would be to petition to a Board of Review, which can be done online or by mail. After that, owners can appeal to the State Appeal Board or district court.
- Scott County Assessor’s Office: 563-326-8635
- City of Davenport Assessor’s Office: 563-326-8659
