mark katz, assessor south fraser region april 28, 2009 · 2015. 6. 5. · mark katz, assessor south...
TRANSCRIPT
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Mark Katz, Assessor
South Fraser Region
April 28, 2009
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Presentation Outline
A comment on BCA’s Business Cycle
Setting value
2010 Roll Values – Early indications
2010 Roll Non Market Change
Reporting Risk – 2010 Roll volatility
Legislative Changes
2
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BCA Business Cycle – Work Programs
April – September
o New Construction
o Quality Enhancement Projects (QA)
o Data Collection
o Sales Editing
September – November
o Market Analysis
o Value updating
o New Construction
Early December – Roll production cut-off
December – Audit / Client Report Preparation
3
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How Do We Value Different Properties?
BCA Estimates Market Value as of July 1st:
Most probable price that an unencumbered
property would sell for on the open market if
a reasonable amount of time is allowed to
find a purchaser.
Based on sales of comparable properties at
similar Highest & Best use
We don’t set the market but we do need to
interpret the sales and reflect them in
valuations.
4
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How Do We Value Different Properties?
Sales on or around valuation date (July 1)
are analyzed to develop common units of
comparison
Units of comparison are used to value
properties with similar characteristics.
3 main Approaches for Market value
Properties:
o Market Comparison
o Income
o Cost
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A word about Highest & Best Use
6
This is the starting point of any valuation
All properties are valued based on the fact an investor will pay a
value that reflects the highest return under current zoning, OCP,
permitted use etc.
ICI - If present worth of the income stream on the current
improvements does not support the existing land value as if vacant,
the market value will not be lower than land value
Value in these cases will reflect vacant land value and potentially
some holding value for the improvements.
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Market Overview - Revisiting Bill 45
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2009 assessment notices - contained values as at July 1st 2007
(previous roll value ) and as at July 1st 2008.
2009 Assessed value reflected the lower of these 2 values
For properties with non market changes - assessments reflected
inventory as Oct.31/08 but market level at either July 1/07 or
July 1/08 - whichever was lower
Approximately 94% of the time the lower value was July/07
Bill 45 is not effective for 2010 Roll
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Through out much of the 1st half of 2008 residential values in
most areas of BC were still increasing.
Markets in most areas peaked between March and June 2008
and then started declining.
Market increases to July/08 were not reflected on the 2009
Assessment Roll due to Bill 45
In a small % of properties values as of July/08 were lower than
the 2008 Assessed values (July/07). These values were reflected
on the 2009 Roll under Bill 45.
Market Overview (SFD/Strata)
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9
SFD/Strata properties in most areas of the province have shown significant value declines since their peaks in 2008 - generally in the range of (10-25%)
Value declines vs. July/07 levels are more moderate, but as of March/April 09 still in the range of (5-10%) lower for most areas.
Current listing prices indicate we may see further declines in the market by the time all sales data supporting values around July 1/09 are analyzed.
Despite generally declining markets, some pockets may still experience increased assessments where the July/09 level is above that of July/07.
2009 Sales volumes declined dramatically in most areas, but have picked up in March/April. (50-60% over the same period in 2008)
Market values have leveled off in most areas in the past month.
Market Overview (SFD/Strata)
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SFD Sales Volumes 2007 - 2009
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Region
#Sales
Q1-07
# Sales
Q1-08
# Sales
Q1-09
% Change
Q1/08-Q1/09
1 – Capital 895 1,250 469 -62%
2 - Vanc. Island 1,496 1,325 488 -63%
3 - Vanc. Sea/Sky 1,754 1,447 633 -56%
4 – North Fraser 1,131 874 336 -62%
5 – South Fraser 2,078 1,900 514 -73%
6 – Fraser Valley 1,596 2,066 551 -73%
7 – Okanagan 1,395 1,471 503 -66%
8 – Kootenays 437 335 149 -55%
9 – Thomson Cariboo 646 475 217 -54%
10 –North 805 589 384 -35%
Province 12,233 11,732 4,244 -64%
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SFD Market Trend – Province (Jan 07–April 09)
0.600
0.700
0.800
0.900
1.000
1.100
1.200
2007_Q1 2007_Q2 2007_Q3 2007_Q4 2008_Q1 2008_Q2 2008_Q3 2008_Q4 2009_Q1 2009_Q2
Provincial Single Family Residential SAR by Quarter
Values 2007_Q1 2007_Q2 2007_Q3 2007_Q4 2008_Q1 2008_Q2 2008_Q3 2008_Q4 2009_Q1 2009_Q2
*2009_Q2 sales are only 01-APR to 21-APR 2009
Count 12233 19484 18776 13923 11732 13045 8916 5104 4244 468
Median of SAR 0.979 1.024 1.047 1.072 1.111 1.124 1.098 1.039 0.981 0.970
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SFD Residential Market Trends
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Region
Change
Peak- Apr/09
Change
Jul/07-Jul/08
(Not on 09 Roll- most
cases)
Change
Jul/07-Apr/09
1 – Capital -15% +8% -7%
2 - Van. Island -15% (04) / -23% (06) +9% / +12% -6% / -11%
3 - Van. Sea/Sky -14 (08) / -20% (09) +9% / +6% -4% / -12%
4 – North Fraser -15% +5% -10%
5 – South Fraser -11% (11) / -16% (14) +15% / +2% -4% / -12%
6 – Fraser Valley -13% +5% -7%
7 – Okanagan -23% (17/19) / -14% (20) +9% / +6% -9% / -1%
8 – Kootenays -24% (21) / -27% (22) +22% / +15% -2% / -11%
9 – Thomps/Carib -15% (23) / -29% (24) +10% / +14% +7% / -14%
10 –North -30%(25) / -13%(26) / -9%(27) +20% / 0% / +11 -9% / -13% / -3%
Province -15% +7% -7%
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Res. Strata Sales Volumes
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Region
#Sales
Q1-07
# Sales
Q1-08
# Sales
Q1-09
% Change
Q1/08-Q1/09
1 – Capital 667 806 333 -59%
2 - Vanc. Island 533 436 170 -61%
3 - Vanc. Sea/Sky 2,807 2,430 846 -65%
4 – North Fraser 1,601 1,511 444 -71%
5 – South Fraser 2,672 1947 568 -71%
6 – Fraser Valley 1,366 1,396 409 -71%
7 – Okanagan 732 628 216 -66%
8 – Kootenays 188 205 53 -74%
9 – Thomson Cariboo 256 194 50 -74%
10 –North 153 68 22 -68%
Province 10.975 9,621 3,111 -68%
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Strata Market Trends – Province (Jan 07–Mar 09)
0.600
0.700
0.800
0.900
1.000
1.100
1.200
2007_Q1 2007_Q2 2007_Q3 2007_Q4 2008_Q1 2008_Q2 2008_Q3 2008_Q4 2009_Q1 2009_Q2
Provincial Strata SAR by Quarter
Values 2007_Q1 2007_Q2 2007_Q3 2007_Q4 2008_Q1 2008_Q2 2008_Q3 2008_Q4 2009_Q1 2009_Q2
*2009_Q2 sales are only 01-APR to 21-APR 2009
Count 10975 12771 13009 11573 9621 8769 5362 3445 3111 261
Median of SAR 0.994 1.025 1.041 1.064 1.103 1.112 1.089 1.025 0.966 0.961
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Residential Strata Market Trends
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Region
Change
Peak- Apr/09
Change
Jul/07-Jul/08
(Not on 09 Roll- most cases)
Change
Jul/07-Apr/09
1 – Capital -11% +7% -3%
2 - Van. Island -15% (04) / -10% (06) +10 / 15% -5% / +5%
3 - Van. Sea/Sky -16% (8) / -17 (9) +9% / +7% -6% / -9%
4 – North Fraser -13% +5% -7%
5 – South Fraser -16% (11) -13% (14) +8% / +4% -6% / -8%
6 – Fraser Valley -13% +5% -7%
7 – Okanagan -21 +8% to +10% -10% to -12%
8 – Kootenays Insuff. Data Insuff. Data Insuff. Data
9 – Thomp / Carib Insuff. Data Insuff. Data Insuff. Data
10 –North Insuff. Data Insuff. Data Insuff. Data
Province -15% +7% -7%
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Residential/Multi Family Development:
Most new residential housing and condominium / townhome
projects are now on hold:
o Projects previously funded are under construction
o Saturated market for new product has created and imbalance in
supply/demand
o Cost and availability of financing
Sales activity is virtually non existent. We expect to see falling
values for multi-family development land when trades occur
2008 / early 2009 sales for the most part reflect previous
market conditions
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Commercial Properties:
Number of sales transition reduced very significantly
Sales generally take a significantly longer period of time to
complete the transaction by vendor/purchaser and process
through LTSA.
Typically, changes in the market for these properties lag the
changes we see in the residential Market
Many sales recently analyzed by our offices were negotiated
in mid 2008 and do not yet reflect the impact of the current
economic / financial environment.
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Commercial Properties:
Current expectation is that rentals will be trending down
and vacancy and capitalization rates trending up.
This could result in significant drops in the value for this
type of property.
Decreases in 10- 20% are very possible.
Current uncertainty in market is expected to result in
broader range of market transaction for similar
properties. (Increasing COD’s)
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2010 Non Market Change – Business Cycle
Most permit value (not on the 2009 Roll) is not
processed until May – November:
o Weather
o Temporary Inventory collectors
Most appraisal staff/inventory collectors are
deployed in other work during Dec - March:
o Inquiry
o PARP/PAAB
o QA projects
BCA has implemented changes in its business
cycle to support earlier completion/reporting of
NMC
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2010 Non Market Change Trends
City of Vancouver
o Overall Permit value down approx 50% in 1st quarter
City of Surrey: (Jan-Mar 08 vs. Jan–Mar 09)
o SFD units down -62%
o Apart/Townhouse Units down -90%
o $ value residential down -79%
North Fraser Region (Burnaby/Coquitlam)
o Value of permits for SFD’s down 20-30%,
o Strata down 30-40%
o ICI down 40-50%
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2010 Non Market Change Trend
Vancouver Island Region (Nanaimo/Courtenay)
o Permit value down approximately 50%
City of Kamloops:
o Residential permits down approx 60%
o SFD units down approx 85%
Nelson
o Residential permits down approx 68%
Trail
o Residential permits down approx 54%
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Roll Stability and Reporting Risk
History generally indicates the Assessed
value tax bases provided by BCA are very
stable
Factors impacting 2010 Roll Risk:
o Reduced Sales activity to support valuations
o Economic Environment - Market uncertainty
makes analysis of sales transactions more
difficult
o Rate of change of Roll can result in higher
portion of tax base at risk
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Roll Stability and Reporting Risk
To assist in planning talk to your Regional
Assessors about risk to your rolls.
Risk to 2010 Completed/Revised (PARP)
o Impacts Initial tax rate estimates
o Hot Spots
o Farm value subject to reinstatement
Changes subsequent to the Revised Roll
o Outstanding PAAB Risk
o Non PAAB Supplementary Changes
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Legislated Changes
Legislative change could be dependent
on outcome of May 12th election
Bill 45 applied only to the 2009 Roll
Valuation date 2010 Roll = Jul 1/09
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Legislated Changes
Farm Assessment Review Panel
Established in 2008
o Has been meeting & receiving Input
o Panel report expected mid summer
o Possibility government could act on some
recommendations (or look at other options)
in time for 2010 Roll implementation
o Expect changes to be limited given time
frame for implementation
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Thank You
Questions?