Here’s where property values went up the most — and least — in Mecklenburg County
The old real estate mantra “location, location, location” certainly applies to the property tax revaluation in Mecklenburg County, which saw average value increases ranging from 16 percent in one southwest Charlotte area to 155 percent in Grier Heights.
The drastic differences in new property tax values reflect several real estate market trends, including gentrification in close-in neighborhoods, people’s growing desire to live near the city center and the impact of new transit lines on property values.
New tax values don’t automatically translate to higher taxes, since local boards will set tax rates separately from the revaluation this summer. But the unequal distribution of real estate value increases will likely be a factor in their decision as commissioners and city boards debate rates.
The revaluation was the first since 2011. Part of the reason for the dramatic increases is that the previous revaluation captured values at their low point following the recession, while the current values show the market after years of a major boom. The county plans to move revaluations from every eight to every four years in the future to avoid such swings.
The median increase for residential property values was 43 percent, while the median commercial increase was 77 percent.
Here are four key trends and facts from the property revaluation:
Close-in neighborhoods appreciated the most
The areas that saw the biggest average increase in values were historically black neighborhoods close to uptown. In recent years, they’ve seen a big influx of investors and new residents buying older properties, either to renovate or to tear down and build larger homes.
The five census tracts with the highest average increases include Grier Heights, Washington Heights, Druid Hills, Villa Heights and Belmont. On average, property values in those neighborhoods increased by 126 to 156 percent. Many individual properties doubled or even tripled in value.
“We knew there were going to be significant increases in those areas,” said Mecklenburg commissioner Mark Jerrell. “When it’s actually quantifiable and you can see it, it certainly speaks to the trends we’ve seen. It really is a cold dose of reality.”
Such increases can be a double-edged sword for residents. On the one hand, people who own property are seeing their investments go up in value — and for long-term residents, price appreciation can be a good thing if they want to sell. On the other hand, many of them are worried about higher property taxes, and renters face the added uncertainty of rising rent because of rising tax bills being passed along. Or investor landlords could decide to cash out, leaving renters scrambling.
Suburban property values are still higher
While close-in neighborhoods rocketed up in value, many suburban parts of Mecklenburg County still have houses worth more, on average. Although suburban values increased at a slower rate than close-in neighborhoods, they still grew substantially.
For example, the census tract containing the lakeside portions of Cornelius saw an average increase of just 32 percent, below the median rate for the county. But that percentage increase equates to about $180,000, as the average value of a house there rose to $731,090.
Although Grier Heights property values increased five times as fast — at a rate of 156 percent — that increase only took property values to $133,505. That means the average Grier Heights house is still worth barely a fifth of the average lakeside Cornelius house.
But the area with the highest average property values is the census tract that covers Eastover and part of Myers Park. Property values jumped 37 percent there, to an average of more than $1.2 million.
Property values rose near transit
Another clear trend: the increase in property values along the Blue Line light rail. Property values for the string of census tracts paralleling the rail line’s southern half increased faster than neighboring tracts not along the rail line.
The census tracts covering South End, as well as surrounding neighborhoods like Sedgefield, all increased by 50 percent or more, with most seeing values increase an average of 60 percent and some nearly doubling.
To the north, along the Blue Line extension, property values also jumped, in many cases more than doubling, though the effect was more pronounced closer to uptown. Neighborhoods like NoDa and Optimist Park continue to see dramatic increases.
New tax rates aren’t set
A property value increase doesn’t necessarily mean that property taxes will increase, however. County commissioners, Charlotte City Council and other local governing boards will set their tax rates over the coming months, as they hammer out their budgets. Then, property tax bills will be sent out in July.
Since tax rates and tax values are set independently, it’s likely that local officials will set lower tax rates. That will allow them to offset much of the increase in values — so owners don’t get walloped with a tax bill that doubles or triples — while still bringing in the same, or even more, revenue.
But individual properties whose value increased more than the median are more likely to see tax increases under any scenario, while properties whose value increased less than the median are less likely to see their bills go up.
This story was originally published January 31, 2019 at 3:21 PM.
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