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'Richmond is on fire': New assessments show average Richmond home value leapt 13.7%. See where property values are rising the most.
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'Richmond is on fire': New assessments show average Richmond home value leapt 13.7%. See where property values are rising the most.

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Reuters polled more than 100 property market experts across the globe, and the survey shows that home price inflation and housing costs will continue to rise. Rising material costs and established professionals pushed younger buyers out of the market, canceling the affordability of lower interest rates.

The average value of a home in Richmond rose 13.7% in the past year, according to new assessments conducted by the Richmond Assessor’s Office.

Citywide, the average value of a home surged to $315,000, up from $277,000 this year and $266,000 the year before. The increase means the average homeowner will owe $456 more in real estate taxes to the city next year when bills are due.

“Richmond is on fire,” said Richie McKeithen, the city assessor. “It’s being eaten up by folks coming to town.”

The city mailed new assessments to property owners last week. Cumulatively, they reflect more than $3.6 billion in new taxable real estate value citywide, a 12.9% increase from last year, according to data provided by the assessor’s office. That far surpasses the highest year-over-year gain of the last decade, when values rose 7.3% between 2018 and 2019.

The region’s real estate market has seen sales prices soar through the COVID-19 pandemic, with low interest rates for mortgages and a dearth of inventory for prospective homebuyers. Bidding wars and sales exceeding the sellers’ original asking price have become commonplace.

That, in turn, influences the way the city’s property assessors assign values to homes in a given neighborhood or area. As sales prices rise, home assessments climb, too, McKeithen said.

The 2021 median sales price in the Richmond area during the first three months of the year was $310,000, up 16%, or $42,500, from a year ago, according to the Richmond Association of Realtors’ annual Central Virginia Regional Multiple Listing Service report, which came out in April.

It was the largest median price increase in five years — and the city of Richmond saw the largest year-over-year jump, with home prices rising by 24%, or $58,000, to $300,500 from last year.

An influx of new residents from outside the region has also played a role, McKeithen said. Even as prices have spiked in Richmond compared to what they historically have been, prospective residents from places that are even pricier view the city as relatively affordable.

Those dynamics have fueled population growth, reinvestment and, by extension, rising assessments in neighborhoods across the city.

“What folks are doing is going into neighborhoods and buying properties and resetting the market, literally, month-to-month,” he said.

He added later: “The fact that developers are coming in buying up lots is driving up land values for everybody. Never before has there been such a degree of profit for building something here.”

Areas throughout the city saw hefty gains. The lowest average home values, of about $90,000, are in the Whitcomb neighborhood in the East End. The highest average values, at $1.18 million, are on Monument Avenue.

Historically Black neighborhoods in South Richmond have seen some of the biggest percentage increases for the third consecutive year. In Blackwell, Oak Grove, Bellemeade and Swansboro, values rose by more than 30%.

Sylvia Maryland, a retired city employee who lives in the Blackwell neighborhood, said her assessment increased by 41% from $179,000 to $253,000.

She said she’s unsure how that will affect her monthly mortgage payments, but is worried since she lives on a fixed income and is the primary caregiver for her disabled 48-year-old son who lives at home with her.

“I haven’t sat down to think about it yet. I’m just so doggone mad,” Maryland said. “It’s outrageous.”

City Councilwoman Reva Trammell, who represents a swath of South Richmond, said she was already receiving phone calls from residents upset about significantly higher assessments.

She advised elderly residents to apply for the city’s tax relief programs for people who are disabled or 65 and older, who made less than $60,000 in the previous tax year and have less than $350,000 in assets. The program offers either a full waiver or partial exemption on an applicant’s tax bill, based on income.

Information on tax relief can be found at rva.gov/finance/assistance.

Trammell added that she thinks the city’s tax rate of $1.20 per $100 of assessed value is too high.

“It’s the highest of anywhere in this area. I know we’ve had a lot of growth and that our population is increasing, but you’ve still got to take into consideration the seniors who are all over the city,” she said. “We need to look after the people who can’t pay it.”

While Trammell said she wants to push the council to lower the real estate tax rate, one of her colleagues proposed another idea.

Councilman Michael Jones, who represents the 9th District, said he plans to propose a new tax abatement program by the end of the year that’s more accessible to city residents, particularly low-income families in South Richmond.

Under the city’s existing program, a homeowner must improve the value of their property by a certain percentage in order to reap future tax relief on the improved value — a barrier of entry for those with modest means.

“When you look at our program now, you need a certain amount of cash to invest,” Jones said. “I want to create something for working families.”

Insulating longtime homeowners from steep tax increases that can lead to displacement should be a priority for city leaders, McKeithen said.

“I think it’s time for us as a city to look at ways to keep residents who have been here in place,” he said. “This influx of folks will continue to come.”

Anyone wishing to challenge their real estate tax assessment must file an appeal to the City Assessor’s Office by Sept. 30. Forms and more information about the appeal process can be found online at rva.gov/assessor-real-estate/appeal-process.

csuarez@timesdispatch.com

(804) 649-6178

mrobinson@timesdispatch.com

(804) 649-6734

Twitter: @__MarkRobinson

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