610 Caswell Ave.
1,811 sq. ft. | 3 bdrms/2 bath | $189,900 | Contact: Jessica Rodocker | Horizon Realty | 386-3311 | www.knoxvillager.com
Just when you thought it was all gentrified, here comes news that Fourth and Gill is undervalued. I'm talking about the article that ran in last week's paper, highlighting how property tax appraisals in the neighborhood consistently lag behind the market—in some cases, considerably. One house mentioned in the article sold for over $300,000 in 2007, yet was recently appraised for tax purposes for less than half that sales figure.
Since it's the county that does the tax appraisals, the wag in me wants to make a crack about them naturally undervaluing the center city—old habits die hard and all. But the truth is, appraisals are always tricky in a center-city neighborhood undergoing revitalization. It's not like your typical new subdivision where all the homes are slight variations on the same three or four builder models. And different levels of renovation, restoration, and architectural integrity lead to considerable more variation than a subdivision's limited palette of "upgrade" packages and "bump-out" options. Generally speaking, each and every restored center-city house is a custom home, tailored to the restorer's particular taste.
And, just to make coming up with comps trickier, fixing value often amounts to comparing apples and oranges. And not just from house to house, either. One of the houses in the article actually had its tax appraisal go down slightly, despite the fact that the current owner had just done a complete gut rehab, likely spending considerably more than its hundred-thousand dollar tax appraisal in the process. So why was the old dump he rehabbed valued at about $12,000 more than the newly restored version? Well, for starters, that old dump was a four-unit income producing rental property, not a single family home.
Current hiccups in the system aside, the long-term trend has been a significant rise in the neighborhood's appraisals. And, just so you folks out in the county know, that's taking the heat off you. State law requires reappraisals to be revenue neutral, so the spike in center-city values helps keep the overall tax rate lower.
Take this house on Caswell. I couldn't find a history of county tax appraisals online, but from 1997 to 2008, its city tax levy climbed from $216 to $861. And most of that jump occurred after a thorough renovation circa 2003. Not only did the work restore the original hardwood floors, fireplace, and other features, it also turned what was once a one-story two-bedroom, one bath home into a two story three-bedroom home with two baths and an all-new kitchen with stainless steel appliances.