Folkmoot festival has lost a vital source of advertising money, jeopardizing its ability to lure visitors to Haywood County during the festival’s two-week summer run.

The Haywood County Tourism Development Authority announced its intention this month to yank its annual contribution to Folkmoot USA. The TDA has given Folkmoot between $6,000 and $12,000 every year since the festival’s inception in 1984.

Folkmoot President Chuck Dickson made a heartfelt pitch to the TDA board last week, asking them to reinstate the funding.

“Folkmoot has helped put Haywood County on the map and has definitely enhanced Haywood County’s reputation as a tourist destination,” Dickson told the 15 members of the TDA board.

TDA board members cited a still-slumping economy and overhead associated with a new downtown Waynesville visitor center as the culprits.

The festival turns Haywood County into an international bazaar every July, with more than 200 dancers and musicians from a dozen countries staging a series of performances and parades. The TDA funding is spent marketing the festival to audiences across the South.

Last year, Folkmoot only got a portion of what they requested — $6,000 of the $9,000 they were looking for — which covered just under a third of the $19,000 spent on advertising.

Cutting the contribution altogether would hurt Folkmoot’s ability to publicize the festival. Dickson said Folkmoot helps TDA achieve its own mission of luring overnight visitors.

“We put heads in beds — perhaps more than any other event in Haywood County,” said Dickson. “In 2010, 5,000 people attended ticketed events, 2,000 attended free events, and over 50,000 attended the parade and Festival Day, two events for which Folkmoot receives absolutely no money.”

Dickson came armed with both a crowd of Folkmoot supporters and an economic impact study done by Western Carolina University in 2008.

The study walks through the particulars of just how much money and business the festival pulls into the county, but the final total was over $4 million for the 2007 festival.

“These contributions not only increase the appeal of the festival from year to year, but help reinforce the attractiveness of the area in general and that of all other cultural events in the region,” summarized the study.

 

TDA cuts spurred by budget woes of its own

None of the TDA board members were arguing against that claim. In fact, several espoused the merits of having such a large and unique event housed in the county for such a long time.

However, they weren’t enamored enough to restore the funding.

The TDA board cited the same oft-repeated reason for budget cuts heard at the local, state and national levels of late: it’s the economy, what else can we do?

“It’s more about looking at harsh finances right now and looking at the bigger picture. I would rather give people more money, but we’re just in a situation with the budget and the money’s just not coming in,” said Jennifer Duerr, TDA board member and owner of the Windover Inn.

The TDA raises money with a 4 percent tax on overnight lodging, bringing in close to $1 million a year. As tourism has dropped with the recession, however, the TDA has seen its budget shrink by nearly $300,000 in three years.

This year alone, the TDA has come up $115,000 short of what it anticipated, leaving the agency struggling to make mid-year budget cuts.

TDA Board Member Ken Stahl floated the idea that Folkmoot lobby Buncombe and Jackson counties for contributions, but Dickson said that tactic was a bit of a long shot, given that they only put on a max of two shows in those counties.

The official suggestion was that Folkmoot apply to special pots of TDA money controlled by individual communities within the county. Maggie Valley, Waynesville, Lake Junaluska, Canton and Clyde each get a slice of TDA money to spend on pet projects, from concerts to brochures to micro-level marketing. A quarter of the total TDA budget is divvied up among the county’s five locales.

The TDA board told Folkmoot to take its request to the five committees that oversee the five pots of money.

Folkmoot has historically been paid out of the general fund since the festival is county-wide and holds events in literally each of the five locales, Dixon said. So which one would Folkmoot apply to? The board told Dixon to apply to all five.

The problem there is that those committees won’t have any cash to hand out until autumn at the earliest. In fact, grants for this round of funding were approved later at the same meeting.

Not everybody on the TDA board was in favor of cutting Folkmoot from the tourism agency’s general budget.

Mark Clasby, the county’s economic development director who also sits on the TDA, was vocally opposed to revoking the money.

“The recognition Folkmoot has brought to Haywood County is tremendous, and I disagree with the recommendation that you’re making,” Clasby told board members. “I think it’s wrong.”

Clasby said that Folkmoot is so well-known it’s one of the tools he uses to pitch Haywood County when he’s out courting business development for the county, and that if any organization deserves the money, it’s Folkmoot.

“I certainly understand the budget situation we’re all facing, but at least give them some funding and support,” said Clasby.

TDA Board Member Jennifer Duerr countered Clasby’s view, arguing that it’s just about a change in the way funds are given out, thanks to the economy. The dwindling general fund should be kept for county-wide causes, she said.

“It’s not that we want to not give the money, it’s just not there. Do we give the money to one event, or keep it to represent the entire county?” asked Duerr.

Other members voiced similar views, with Alice Aumen, the board’s chairperson, saying that this year’s budget has been particularly trying.

“It has been one of the most difficult years since I’ve been on the board,” said Aumen.

James Carver, owner of the Maggie Valley Restaurant and board member, said he’d love to give Folkmoot money this year, but that it just wasn’t there.

“I‘ve always been a big supporter of Folkmoot, but money’s down,” said Carver.

In the end, the TDA board gave Dickson and his compatriots their apologies and an invitation to come back and ask again next year, but if they were hoping for a check, they went away empty handed.

“What we would like to leave Folkmoot with is that it is an important event. We all hope it’s going to be a great year for travel and tourism and revenues are going to come up,” said TDA Board Member Sue Knapko, encouraging festival officials to come back again if the committees don’t work out.

Haywood County, like everyone else, is bracing for the impact of state budget cuts. But the good news is that they may leave the budget fray with fewer scrapes than they thought.

In Raleigh, budget committees have been busily trying to bang out cuts in the billions, and while nothing is yet final, a proposed House budget released last week gave a view of the carnage that may be to come.

So Haywood commissioners met with county staff to hash out what this might mean for the county’s budget and the services that rely on it.

Though there will certainly be state cuts that will fall to counties to pay for, but County Manger Marty Stamey told commissioners at a budget workshop last week he’s not as concerned as he could be.

“Best case scenario, we’ll be $250,000 out, which is good,” said Stamey, meaning that a mere $250,000 shortfall would be their best landing in the budget fallout. “A lot of counties would be proud to be where we are. People say what they want to say, but budget-wise, we’ve done the right things over the last few years.”

The county’s budget is still in flux, waiting on both state cuts and the reaction of other groups, such as community colleges and the school system, which may come to the county for helping plug holes from state cuts of their own.

Currently, community colleges are looking at a 10 percent reduction in state funding, while K-12 education was slightly shielded, only facing an 8.8 percent cut.

One area where the county might feel some crunch is in its health and human services budget. The state is seeking to reduce spending there by $527 million, including $527 million in Medicaid, $67 million for mental health services and half of the funding for senior centers. Also on the chopping block are Community Care block grants and Smart Start spending.

“Human services are really busting at the seams for demand in this county,” said Stamey, noting that a decline in services would affect many citizens harshly.

Another proposal that staff said seemed likely to come through is the closure of four state prisons. Though there’s no word yet on which prisons would close, it would shift the burden of housing prisoners serving time for misdemeanors to county jails.

Stamey reported that, while Sheriff Bobby Suttles said he was confident he could house the criminals currently in the system, predicting whether they’ll have room in the future is impossible.

“That’s one reason that we think we might need to have higher contingency this year, for things like this, because that’s an unknown,” said Stamey.

On the revenue side, Finance Director Julie Davis told commissioners that the picture is no clearer there.

Surprisingly, said Davis, the property revaluation that happened this year isn’t what’s throwing projections into turmoil.

Usually, property values would go up with a revaluation, requiring counties to tinker with the tax rate to offset would would otherwise be an unpallatable rise in property taxes.

But due to the stagnant real estate market, the total value of property remained nearly flat in the recent revaluation — requiring little adjustment to the property tax rate to bring in the same amount of revenue as last year.

Sales tax is a different story, however.

“Sales taxes have been up and down. Looking at the comparison to last year, four months they’re up compared to the current year and three months they’re down,” Davis said. “Were chasing a moving target on revenues.”

The fluctuation makes it hard to predict how much money the county can bank on from sales tax next year, but year-to-date on average, sales tax collections are down 10 percent over last year.

In light of that, and state-level slashing, a property tax rate increase might not be out of the question.

Overall, though state cuts do look grim, Stamey said he’s confident in the county’s ability to stay afloat without undue carnage. But, he said, there just aren’t any solid numbers yet to be had, so it’s impossible to know for certain.

“We’re at the mercy of a lot of people’s budget’s right now to sort of figure out our budgets,” said Stamey. “I feel like I’d be doing us an injustice right now [to give numbers].”

The picture painted by county staff was in broad strokes, an overview of what could be coming in stead of the nuts and bolts of what to do about it. But that was purposeful, according to Davis.

“We specifically did not mention numbers or the revenue neutral rate because there is so much up in the air right now,” said Davis.

Commissioners will be meeting throughout the spring for more budget talks, though they noted that much of it is out of their hands.

As Commissioner Kevin Ensley said, “so if the state leave’s us alone, we’ll be alright.”

A state budget is expected by early June.

 

Haywood schools talk budget

Haywood County Schools could be facing a budget shortfall of $4 million if the state House of Representatives proposed budget gets adopted. The school board held a public hearing on Tuesday to hear community feedback and discuss what cuts might mean for local schools.

The reductions would mean 46 positions would be slashed within the system. Teacher assistants would be scaled back by 49 percent, textbooks by 68 percent and dropout prevention programs, school technology and staff development initiatives, among other things, would be eliminated.

See www.smokymountainnews.com Thursday for an update on the public hearing and the impact of threats to school funding.

An angry crowd accused Haywood County commissioners this week of unfairly slapping some property owners with higher values while letting others off the hook in the recent countywide appraisal.

About 50 people turned out at the commissioners meeting Monday to complain that appraisers had botched up when assessing their properties. At best, they blamed commissioners for being complicit in an erroneous property revaluation — and at worst for being part of a conspiracy to target certain property owners with deliberately inflated values.

Commissioner Mark Swanger explained that commissioners don’t have a role in revaluation. Revaluation is conducted by appraisers, who examine the prevailing real estate market to arrive at new property values.

Since property values determine how much you pay in property taxes, the biggest fear from the audience was that their taxes would go up as a result of higher property values.

“There are people who don’t have extra money in their pocket to keep on donating to taxes,” said Horace Edwards of Cruso, who helped organize the turnout.

Generally real estate increases in value a little every year. But given the depressed market, many homes have stagnated in value and others have even gone down.

Yet half the property owners in the county saw an increase in value since the last countywide appraisal five years ago. And that’s what Jonnie Cure said she doesn’t understand. How could anyone’s have gone up?

“What has happened in Haywood County? I simply don’t get it. It is truly incredible,” Cure said.

Yvonne Mazet, who lives in a single-wide trailer, said she can hardly afford her taxes now, let alone now that her property values have gone up.

“I don’t feel my taxes should have gone up,” Mazet said. “I don’t think in this economic era we are using our heads very well. I think this is a very bad choice to re-evaluate our property.”

Commissioner Kirk Kirkpatrick said the purpose of a revaluation is not to force higher taxes on anyone.

“Our goal in this process is not to raise people’s taxes. It is to make sure the values are fair when we apply the tax rate,” Kirkpatrick said.

Edwards said it isn’t fair that more expensive homes have dropped in value, while lower or median priced ones increased. Edwards implored commissioners to use the weight of their office to “take some action and fix it.”

But the county is required to base values on comparable sales of similar property.

If expensive homes aren’t selling for as much as they used to, the county appraisers had no choice but to decrease the value of those homes to reflect selling prices the real world.

“We cannot choose to violate the law. That is not an option for us,” Swanger said.

Denny King questioned whether the appraisers accurately pegged market values, however.

“The real test for appraisals is if you put the property up for sale would they sell within a reasonable amount of time for the appraised value?” asked King, who ran for county commissioner as a Tea Party supporter last fall but lost.

Justin Hensley said he never saw an appraiser.

“No one came to our house. I don’t know how they came up with these numbers. You can’t fly over in an airplane and come up with this stuff. It is really unfair and it is totally unaccurate,” Hensley said.

Appraisers indeed visited each parcel, but they do not come inside and usually don’t get out of the car.

In Haywood County, it has been five years since the last revaluation. Counties are required to do one at least every eight. Some speakers questioned why the county didn’t wait another three years.

Jack Wadham said large numbers of people might refuse to pay their property taxes and sue the county over the revaluation. As long as the lawsuit was pending, they wouldn’t have to pay, he said, and the county would go broke waiting to collect taxes.

“That is not a threat. That is just telling you what could really happen,” Wadham said.

The crowd applauded after most of the speakers, occasionally offering up a standing ovation, but did not get unruly.

When public comment concluded, commissioners started to respond to the crowd’s concerns, but the audience got up and walked out, at first one by one, then en masse, in an obvious flout to the commissioners’ attempts to explain the revaluation.

Several in the audience told commissioners the revaluation would cost them their seats in the next election.

“It was kind of convenient that you did not do this on an election year,” said Cure. “I am sure you are hoping we forget you did it by 2012.”

Swanger repeatedly urged those who complained about their property values to appeal. The first step is to make an appointment with the county’s property appraisal office. The appraisers will share how they arrived at the property value, generally by citing the price fetched by similar property that was sold. The property owner can then explain why they believe the value is wrong.

David Francis, head of the county tax department, said the appeal process works. He shared an example from one property owner who has utility lines on their property that would hurt its selling price. The county appraiser agreed and adjusted the value accordingly.

“I know there is a lot of frustration out there. Give us a chance to sit down and explain it to you,” Francis said.

 

What is property revaluation?

In North Carolina, counties are required to conduct a mass appraisal of real estate at least every eight years. Property taxes are based on property values.

The reval is intended to level the playing field, bringing the county’s assessed value of a particular property in line with the true market value so everyone is paying a fair share come tax day.

In Haywood County, the total value of all property remained flat. If you add it all up — the value of every home, lot and tract of land — it amounts to $6.791 billion, an increase of less than one percent over last year’s total value of $6.787 billion. Roughly half the property owners saw their values go up, while half saw their values go down.

When property goes up across the board in a revaluation, the county typically lowers the tax rate to offset what would otherwise be an increase in property taxes. This time, since there was no net gain in the property tax base, the tax rate will likely remain about the same, and whether your individual taxes go up or down will likely depend on how your property values performed.

While the construction industry, the Haywood Home Builders’ Association is giving itself a makeover, one it hopes can keep them afloat and the doors open.

With home building still flagging, membership has been steadily declining, and instead of waiting on the ship to right itself, they’re beginning to realize that if the economic paradigm has shifted, maybe it’s time to shift with it.

“We have no choice,” Home Builder’s President Jim Howell said frankly. “We’re going to have to change and think outside the box.”

For the home builders, it’s a particularly salient lesson. In a bust that centered around real estate, the folks who build that real estate are going to take a pretty hefty hit.

If you’re looking at unemployment numbers, said Howell, go ahead and double them, and that’s what kind of unemployment you’ll find in the construction sector.

So, unsurprisingly, their membership has dropped — from just more than 200 at the height of the building boom to only 130 members now. The Haywood County Board of Realtors has likewise seen a drop in membership — from 430 Realtors in the county in 2006 to only 261 today.

Given the decline, the Haywood County Homebuilder’s Association isn’t certain it can keep its doors open.

“That’s something that could happen,” said Howell, when asked about the prospect of shuttering the association. “With the current loss of members, it’s very realistic. It could happen in the next year very easily.”

Howell is trying to change the body’s course while he’s at the helm.

They’re focusing efforts not only on how to maintain viability with a smaller membership, but also how to retain those members and give them the services they need in a changing market.

“We’re trying to change the format of our meetings, turn them into social events,” said Howell. “When you are in a business-style format, it’s pretty restricted.”

They’re also looking to other fundraising options, like an iPad raffle they’re holding and a shootout fundraiser planned for the summer.

They’re trying to get more involved in the community, as well, joining with groups like the Board of Realtors and the Chamber of Commerce to bring in more support, better networking connections and hopefully share the burden of a diminishing economy.

And they’re not the only ones who are looking towards changing their tactics.

The Haywood County Board of Realtors has been discussing a merger since last year with the Board of Realtors in Asheville, Henderson and Transylvania. The merger would help lessen the blow of a deflated real estate market by creating one large umbrella board that would help spread costs and consolidate benefits.

When the proposal was first floated to Realtors earlier this year, Lisa Brown, the board’s executive, said they were open to what was best for members, and with such a slip in membership, it’s hard not to see banding together as an enticing option.

“We saw strength in numbers, we could give more services to our members,” said Brown. “So let’s sit at the grown up table, let’s hear the proposal let’s see what’s in it for the association.”

The downside may be less of a local focus in Haywood, however.

Readjusting to a new kind of real estate economy isn’t going to be easy for organizations like Brown’s and Howell’s. But Howell believes that now, more than ever, they can offer their members connections and support that they’ll desperately need going forward.

Recognizing the new and different needs of the county’s homebuilders in today’s climate will be the key to any future success.

“I don’t think the building boom will be as big as it was,” said Howell. “I think we outgrew what we could afford to do, not only as an industry but as a nation. We were too busy living the American dream to sit down and figure out what we could afford.”

In a report released this week, the National Association of Home Builders noted a slip in builder confidence for the month of April. Every month, they do an assessment of home builders across the country, polling them both on the work they have and their confidence in future prospects.

While some parts of the country showed upticks in both jobs and confidence, the South went down.

However, in Haywood County, the construction industry is showing signs of a rebound, albeit a slight one. At the very least, things are leveling off, based on the number of building permits being issued.

And that would be good new for the entire county.

“Anything that happens in the building industry affects every business in this area,” said Howell. “If we’re not working, a lot of people are not buying hamburgers.”

 

By the numbers: Haywood construction permits

The construction industry has been on the decline witnessed by the decrease in all building permits issued in Haywood County. These numbers includes all permits for residential, commercial, new construction and additions.

2006    753

2007    772

2008    499

2009    388

2010    416

* These numbers do not include Waynesville and Canton, which issue their own permits. Building permits for Maggie Valley are included for 2010, but not previous years. Maggie quit administering its own building permits due to a decline in volume with the recession.

Maggie Valley is gearing up for its next round of beauty treatments in an ongoing effort to spruce up the town and bring some color to its streets.

The beautification program, led by master horticulturalist and Maggie Valley resident Clayton Davis, is a sweeping plan that intends to bring color to the valley year-round through mass plantings.

The first phase, which entailed planting tulip and daffodil bulbs in the town’s signature red and yellow, got under way last autumn. The bulbs need to be dropped into cold ground, so the town along with residents and businesses collectively planted several thousand bulbs last November.

The next phase of the plantings will include knockout roses, a famously hardy and simple species that blooms throughout the warmer months. Davis said that other plants intended to add color in the winter months, like nandina, will also be on offer.

The town is able to get wholesale discounts on the plants because they’re buying them in bulk, so citizens and businesses who take them up on the offer get their plants at cut-rate prices, as well as the expertise of Davis and the town’s grounds staff.

After discussion at a recent meeting of the beautification committee, participants will also get fertilizer and Nature’s Helper, a special growth aid, to help their plants along.

For its part, the town is funding the planting of its own properties — such as the landscaped area in front of town hall — with $6,000 it’s set aside for the project. Half of that sum was donated as matching funds by Home Trust Bank.

The idea behind the beautification belongs to Davis, who was inspired long ago by a trip to Summerville, S.C., where azaleas bloomed across the city. Davis and city officials hope this initiative will give Maggie Valley a face lift and bring increased tourist visitation.

Order forms for the plants are available at the Maggie Valley Town Hall and all orders are due by April 18. On sale are Gulf Stream nandinas for $11, nandinas for $18 and knock-out roses for $11. The next meeting of the beautification program will start at 10 a.m. on April 18, in the Maggie Valley Town Hall.

Despite its vibrant façade, downtown Waynesville hasn’t been immune to the economic recession.

So Richard Miller was surprised, to put it mildly, when he learned his downtown building doubled in value over the past five years — at least according to the county’s appraisers. Miller disagrees with their assessment.

The book value of Miller’s building on Main Street went from $431,000 to $800,000 in the recent countywide property revaluation.

Property values determine property taxes: the higher the value the higher the tax. And that’s what concerns Miller.

If his taxes go up, he’ll have to charge more in rent to cover the cost.

“Could the businesses stay in business if they had to pay that much more in rent?” Miller said. “I’m afraid one of my tenants would leave if I said rent goes up by that much a month.”

The Kitchen Shop and the Blue Owl art gallery occupy Miller’s building at the corner of Main and Church streets.

Most commercial leases automatically go up if property taxes go up, thanks to a clause built in to the lease for just this occasion. Merchants will then have little choice: either absorb the rent hike or pass it along in the form of higher prices to customers.

“The result? Fewer customers, fewer purchases, less profit, more overhead, and more and more doors closed,” said Jonnie Cure, a free market advocate and past downtown property owner. “Too many businesses come and go on Main Street in Waynesville as it is in this horrible economy.”

The steep increase witnessed by commercial property is the exception to the rule in the property revaluation. Residential homes and land largely went down, or at best increased slightly.

Canton saw significant hikes to commercial values as well: a 13 percent increase overall for the downtown district. If higher property taxes force up rent prices, it could break small businesses, said Charles Rathbone, owner of WNC Sign World in downtown Canton.

“The business owners here could not as a rule support that kind of increase,” said Rathbone. “They are struggling every day to keep the light bill paid.”

Rent is cheap in downtown Canton compared to Waynesville, but merchants are still operating in the margins, Rathbone said.

On average, property values in downtown Waynesville went up 28 percent, with the larger jumps seen on Main Street. Miller said Main Street has been singled out.

“Why is Main Street being punished for being successful?” Miller said.

Downtown Waynesville is a selling point for the whole county, said Buffy Phillips, director of the Downtown Waynesville Association.

“We are clearly doing something right,” Phillips said. “Realtors always say if they have a buyer who is on the fence, they drive them down Main Street to close the deal.”

It doesn’t seem fair that their success resulted in such large jumps in property values, which in turn will hurt the very merchants who are the life blood of downtown’s vibrant scene, Phillips said.

Main Street storefronts remain in high demand, however. Downtown Waynesville has only a handful of vacant storefronts, with only a couple on Main Street itself.

While downtown Canton has generally been flush with storefronts for lease in recent years, several have been snatched up lately. New downtown business that have just opened or are coming soon include a computer shop, an office for an outpatient physical therapy provider, an automotive shop and a new restaurant.

“It is beginning to fill,” Rathbone said.

 

What it means for taxes

In downtown Waynesville, higher property values carry a potential triple whammy: they not only determine county and town taxes, but also a special assessment to support the Downtown Waynesville Association, a self-promotion arm for downtown merchants.

Phillips said DWA will likely lower the tax rate in the Main Street district. That means that even though property values went up, the amount paid in taxes won’t go up by the same percentage.

At the county and town level, however, commercial property owners who saw their values go up shouldn’t expect a lower tax rate to offset the increase.

On average, property values flat lined. Although some obviously went up while others went down, the total value of all the property in the county is the same after the revaluation as it was five years ago.

 

How commercial is calculated

Commercial property is valued differently than residential homes and land. The values for homes and land are based on sales of similar property. But there are usually not enough sales of commercial buildings to establish an accurate baseline.

“It is hard to find commercial properties that are truly comparable,” said Ron McCarthy with RS&M Appraisal firm.

So instead, commercial property values are derived from the prevailing rents in an area. Even if the property isn’t being leased, appraisers calculate how much rent income the building would potentially generate if it was.

While residential homes and land were appraised by an in-house team of county appraisers, the county contracted with a private firm, RS&M Appraisal, to do commercial property.

Regardless of the rent-based appraisal formulas, Miller disagrees with his assessment. Rents have not gone up 28 percent in five years, so why did property values, Miller asked.

 

On the rise

Commercial property values increased in the latest Haywood County property appraisal. Here’s the increase for certain districts compared to five years ago.

Waynesville downtown: 27.9%

Canton downtown: 14.6%

Maggie Valley downtown: 8.8%

Clyde downtown: 3.8%

Russ Avenue in Waynesville: 9.5%

South Main Street in Waynesville: 3.6%

Champion Drive in Canton: 26.7%

Haywood County’s property revaluation was a massive undertaking: appraisers had to lay eyes on 50,000 properties, from condos to fast-food joints to farms, and judge whether they had gone up or down in value over the past five year.

Hundreds of property sales from 2009 and 2010 set the bar for new values on the county’s property rolls. But just because a similar home across town sold for $200,000, does it mean yours would also?

In the world of real estate, location is everything, whether it’s a few blocks down or the other side of the ridge.

This year, the county developed a highly-engineered method called “neighborhood delineation.”

The formula carves the county up into nearly 1,000 neighborhoods. From there, the county essentially wrote its own computer program to calculate property values, taking dozens of variables into account. Each variable takes the value up or down a notch, but is only as good as the baseline assigned to the neighborhood.

The methodology is impressive, said Randy Siske, a Realtor and president of the Haywood County Board of Realtors.

“The last time we had a revaluation, the biggest complaint from the real estate community was they were comparing apples and oranges,” Siske said. “I think they really made an effort to compare apples and apples.”

Before, the county was divided into just 17 townships. All of Maggie Valley was lumped together, or all of Bethel.

Now, clusters of just 30 or 40 similar properties make up a neighborhood.

David Francis, Haywood County tax collector, pointed to a map of Hazelwood where a conspicuous donut hole appears in the middle of one neighborhood. A condo unit along a residential street was carved out and made its own “neighborhood” rather than lumping it in with the houses around it.

“That’s how close and how drilled down this is,” Francis said.

When county’s appraisal team reached the final stage of revaluation — a drive-by of every property on the books to double check their formulas — they had identified some 700 neighborhoods. But during their final drive-bys they kept creating more and more.

One appraiser trolling the back roads of Fines Creek left in the morning to survey what she thought was one neighborhood and came back to the office with three: Betsy’s Gap, Price Town and Turkey Creek.

“They were finding out that some neighborhoods were a little broad so they broke them down further,” said Haywood County Tax Assessor Judy Ballard said.

And further and further apparently, until they had added another 250 neighborhoods by the time reval was done.

“Neighborhood delineation” was lot of work on the front end — entering not just the number of bedrooms, square footage and whether a home has a garage — but also the school district, proximity to town parks or mountain views.

Those appealing their property values may have a harder time making their case.

“I think it is going to be more difficult for property owners to get through the appeal process,” Siske said. “I’m not saying there aren’t properties out there that need to be appealed. But finding a property that is $100,000 off in value I think it is very much less likely.”

Property owners in Haywood County faced a Catch 22 when their new property values arrived in the mail last week.

If your value went up, it’s nice to know the lackluster real estate market didn’t undermine your home’s worth. The downside will be higher property taxes. Those who saw their value go down will likely pay less in taxes — but it’s hard to be excited that your home isn’t worth as much as it used to be.

The total value of property in the county remained flat. If you add it all up — the value of every home, lot and tract of land — it amounts to $6.791 billion, an increase of less than 1 percent over last year’s total value of $6.787 billion.

The flat figures mean the county escaped the brunt of the national real estate downturn. As a result, the county won’t have to hike the property tax rate to bring in the same amount of money as last year.

“I am relieved there were no gigantic swings,” Commissioner Mark Swanger said.

Had property values gone down as a whole, the tax rate would have to go up for the county to collect the same amount as last year. Commissioners would be hard-pressed to explain the nuance of raising the tax rate, but not really raising taxes given lower property values.

Commissioners have been sparred that dilemma, but only to some degree.

Unfortunately, Swanger pointed out that sales tax collected by the county might be down as consumers are buying less. And the state is poised to stick the county with more of the tab for everything from road paving to education, Swanger said.

Commissioners may be faced with raising property taxes to make up for these shortfalls — unless they want to cut the county’s budget for the third year in a row, something that may not be possible, they said.

“We have already reduced it almost as much as we possibly can,” said Commissioner Kirk Kirkpatrick.

If the state cuts education, does the county hang the schools out to dry or pick up the cost locally?

“We have to wait and see what Raleigh does and then decide as a community and as commissioners, what do people want? What do you want your government to do?” Kirkpatrick said.

Those tough decisions will be facing the county over the next few months. A budget — and tax rate — will be hashed out by July 1 when the new fiscal year starts. Then, and only then, can homeowners pull out their calculators and know for sure what their new property values will mean for their tax bill.

 

Why the revaluation?

In North Carolina, counties are required to conduct a mass appraisal of real estate every eight years — called a revaluation, or “reval” for short. Property taxes are based on property values — the more your property is worth the more taxes you pay. The reval is intended to level the playing field, bringing the county’s assessed value of your property in line with the true market value so everyone is paying their fair share come tax day.

 

How do you calculate taxes?

Here’s how to figure county taxes at the current tax rate at 51.4 cents for every $100 of property value. Divide your property value by $100 then multiply by 0.514. This doesn’t include fire taxes for your fire district or town taxes if you live in the town limits. Bear in mind commissioners won’t set this year’s final tax rate until June.

When Mollie Weaver put her house on the market two weeks ago, she was bracing for the worst. She’d been here before, for two years in fact, when her house languished on the market from 2007 to 2009.

“Of course that was when things were rapidly changing,” Weaver said. “We learned from that.”

This time, the mom of three got serious.

“In the higher price ranges, there is stiff competition. There are brand new homes that haven’t sold, and if you can’t compete with that you have to slash down your price,” Weaver said.

ALSO: New values based on hyperlocal formula

So she did, and Weaver’s house in the Iron Duff area of Haywood County was under contract within a day.

She’s selling at a loss compared to where she bought it in 2006, but hopes to make up the difference when she finds a new house: “We sell at a bargain and we buy at bargain.”

Weaver’s story sounds familiar to anyone who’s tried to buy or sell and home in the mountains.

But now for the first, time there are hard-and-fast numbers painting a full picture of real estate values in Haywood County.

Every home, lot and tract of land in the county — all 50,000 of them — have been reappraised to reflect the current real estate market. New values were sent to property owners last week, and many learned their property was worth less than the last countywide appraisal five years ago.

In the past, you could count on values to go up with the exercise. But it’s a different ball game this time, and many anticipated a dramatic decline in property values.

Nationally, the recession has wreaked havoc on the real estate market. A glut of homes coupled with a dearth of buyers forced sellers to slash prices, and real estate values entered a downward spiral.

“To be competitive, to sell your house, you have to undersell the guy down the street and that’s what’s driving your market down,” said Randy Siske, a Realtor and president of the Haywood County Board of Realtors.

ALSO: What new property values mean for your taxes

But the property reval carried rather pleasant surprise in Haywood County when it came out last week.

“Overall we did not have a total collapse here as some other markets did. You don’t see things crippled here,” said David Francis, director of the county tax department

The total value of property — if you add up every home, business and piece of land — essentially remained flat. Roughly half the property owners in Haywood County saw their values go up, and half saw them drop, Francis said.

Keith Gibson, a private property appraiser in Haywood County, said pegging property values has been extremely difficult lately — the most difficult he’s experienced in his 25 years in the business.

Appraisals are dictated by the selling price of similar property. During the boom years, Gibson followed suit with the high prices in the market place, but he often found himself shaking his head over his own appraisals.

“We were seeing things that were unbelievable,” Gibson said. “We made predictions that this cannot go on like this.”

And indeed it didn’t. Property values fell with the recession, and fast, making it hard to know whether last month’s sale was a still an accurate yardstick for today’s appraisal.

“I have never seen values go down in Haywood County until the last two years,” Gibson said.

Fearing the real estate market was still in too much flux to accurately peg property values, Francis last year urged commissioners to postpone the reval until 2012. They had already postponed it one year, from 2010 to 2011.

“We collectively agreed to postpone it for a year because we were afraid there might not be enough valid sales to do as meaningful and accurate a revaluation as possible,” Commissioner Mark Swanger said.

Tax Assessor Judy Ballard didn’t have to dig deep to illustrate the problem. She randomly picked Triple Creek subdivision from a stack of property assessments. In the reval five years ago, appraisers had a long list of lot sales to base their estimates on — 25 of the 40 parcels in the subdivision had sold in the prior two years.

But this time, there were only four recent sales in Triple Creek, and they all fell below their former values.

Francis thought it wouldn’t hurt to delay the reval yet another year, as several neighboring counties have chosen to do. Jackson, Macon and Buncombe counties postponed theirs until 2013, and Swain until 2012.

But commissioners decided to take the plunge in Haywood this year.

Doing so keeps the reval from falling in an election year — although Swanger said this wasn’t the reason. Revals can be contentious and politically charged since tinkering with the tax rate will usually follow on its heels. But Swanger said the county had already entered a contract with an appraisal firm and delaying it could have cost the county fees.

 

Fewer appeals

In the past, angry property owners flooded the county tax office after seeing their new values, outraged by the sharp increase — and fearing the higher property taxes that would follow.

But last week, a county appraiser stationed at the tax window to field inquiries was sitting idle. A basket labeled “property appeals here” was empty, and a jar of fresh pens on the window ledge was untouched.

The county hasn’t seen nearly as many appeals this time, Francis said. For starters, “sticker shock” of rising real estate that played such a large role in past revals is obviously absent this time. But the values are likely more accurate than they’ve ever been this time, thanks to a new, highly engineered formula (see related article.)

“The county had a huge job to do and I think they did a pretty darn good job overall,” said Realtor Phil Ferguson, the owner/broker of The Seller’s Agency.

Ferguson said the county’s new values for his property were in the “ballpark,” and that is actually impressive.

“When they have 50,000 properties to go out and evaluate, there is no way to do it perfectly,” Ferguson said.

The county’s team appraises homes from the curb, stopping at each one but not going in. There’s a lot they might miss inside, said Gibson.

“The counter tops, the doorknobs, whether it has 10-foot ceilings, hardwood floors,” Gibson rattled off a few. Even whether a house has stained oak woodwork instead of painted baseboards and door jambs.

This year, the county is actually seeing appeals from people who think their new values are too low. While it seems odd to lobby for a higher appraisal — since higher values mean higher taxes — that’s exactly what some people are doing, Francis said.

He spoke to one property owner who saw a tract of land — land took the biggest hit in values — fall from $550,000 to $100,000.

“She was very concerned,” Francis said.

Francis has also fielded calls from homeowners who owe more on their mortgages than it is now worth. They want to know whether the bank will come knocking, asking the upside-down mortgage holders to pony up the difference. Francis assured them that’s not the case.

 

The winners and losers

While generalizations don’t apply to every house in every neighborhood, there are some trends.

•  Commercial went up, especially in downtown Waynesville (see chart).

• Tracts of land went down substantially. Land, once considered a mini-gold mine, is no longer in demand by developers. Plus, banks have balked at financing land.

• Lots in subdivisions went down, also due to old fashioned supply and demand. While there’s hundreds of lots for sale, the tanked economy halted the mountain migration of retiring baby boomers.

• Property closer to town held its value or went up compared to rural areas. On average, property values fell in Crabtree, Iron Duff, Jonathan Creek, Fines Creek and the like, while they went up in the towns of Waynesville and Canton and in areas closer to town.

• High-end homes went down, while lower priced homes went up. It’s no surprise, since expensive homes have been in less demand while affordable ones are highly sought.

“On a sliding scale, the higher you go the greater decrease you would find in price,” said Kirk Kirkpatrick, a county commissioner and attorney who has a bird’s eye view of the market through real estate closings.

Kirkpatrick’s own house in Laurel Ridge went from a value of $800,000 in 2006 to $650,000 in the recent reval.

But a small home he owns on the outskirts of Canton went up from $78,000 to $100,000 — a case in point that lower priced homes have gone up compared to expensive ones.

There’s a side effect come tax day, however. High-end property owners will no longer pick up as much of the county’s property tax tab as they once did. Median home owners will see their share of tax burden go up comparatively.

“That is an unfortunate outcome of what this economy has done,” Swanger said.

Of course, the county was lucky to lean on the higher-valued properties for the years that it did.

“I don’t think there is any question the real estate bubble artificially inflated the value of the upper-end homes. They are now back to where they should have been all along,” Swanger said.

 

Turn around coming

Realtor Randy Siske said it is important to take the long view. If you only look at how much your property went down since the last reval in 2006, you ignore the dramatic rise leading up to 2006. In the first half of the decade, property values rose by so much that even though they have taken a step back now, it’s more like one step back for two steps forward.

There has still be a net gain in value over the decade as a whole — although it’s hardly consolation to those who bought at the market’s peak.

Real estate watchers see an uptick on the horizon. After two years of decline, the number of homes sold last year leveled off (see graph).

“It has started to stir now. There have been several good closings in the last couple of months,” Gibson said.

Before prices can fully recover, however, the number of homes on the market needs to be thinned out.

“There is still a lot of inventory on the market. If people don’t absolutely have to sell right now they probably shouldn’t,” Ferguson said.

The converse is certainly true.

“Now is a great time to buy,” Ferguson said.

 

 

What went up, what went down

Median and lower-priced in-town homes held their value compared to tracts of land and mountainside subdivisions, which fell in value. Commercial went up nearly universally. Here’s a break down by geographic region of the county.

Town of Waynesville: +4.22%
Waynesville outskirts: -0.29%
Town of Canton: +1.85%
Beaverdam (Canton outskirts): +3.86%
Town of Maggie: -0.67%
Ivy Hill (Maggie outskirts): +2.76%
Town of Clyde: +6.75%
Clyde outskirts: -2.25%
Jonathan Creek: -0.43%
Crabtree: -3.92%
Iron Duff: -9.99%
Fines Creek: -11.95%
White Oak: -17.93%
Cataloochee: -14.39%
Lake Logan: +1.49%
East Fork: -3.17%

Commercial
Waynesville downtown commercial: +27.9%
Canton downtown commercial: +14.6%
Maggie Valley downtown commercial: +8.8%
Clyde downtown commercial: +3.8%

It’s what everyone wants to know: is their neighbor’s house worth more or less than their own?

It’s not hard to find out at the county’s mapping site, where there’s a plethora of property revaluation data to keep even the most obsessed followers of local real estate busy for days.

Here’s how to navigate the county’s online mapping and tax information.

 

How to view property information:

• Go to http://maps.haywoodnc.net/gisweb/default.htm. (Or, from Haywood County’s home page, click on “maps” on the left.

• Search for your parcel by name, or click on “PIN” to search using the PIN number from your property notice.

• Your property will be highlighted in blue. You can also see your total assessed value, acreage, and so forth.

• For more complete details of the property, such as number of bedrooms, heated square feet, etc., click on “view tax card” on the lower left.

• To see the value of your neighbors’ property, click on “adjoiners” on the lower left. A list of neighboring parcels will appear. As you scroll over the list, the parcel on the map will be highlighted. Click “details” for the parcel you want to see info for. Click “back to search results” to get back to the list.

• To see the details of any parcel, first click on the “identify” button across the top, then click on the parcel you want to see.

• To move around your neighborhood, click on the symbol of the hand across the top and then use the tool to drag the map around.

 

How to find recent real estate sales:

• To see what recent sales in your neighborhood were used as a baseline for your property revaluation, pull up your own parcel (using directions above.)

• Click on “select viewable layers” (in the black bar just above the map).

• In the list on the left hand side, check the boxes for “revaluation neighborhoods” and “valid sales.” (Don’t uncheck anything that is already checked.)

• Recent sales used to determine property values in your neighborhood will be outlined in red. You may have to zoom out to see them.

• To see the details of any of the parcels, first click on the “identify” button across the top, then click on the parcel you want to see.

 

How to find old property values:

• Only the latest property values from the revaluation show up with the parcels on the map site.

• To find the old values for a parcel, go to http://www.haywoodnc.net/index.php?option=com_content&view=article&id=960&Itemid=134 (Or, from Haywood County’s home page, click on “taxes online” on the left side.

• Type in the name of the property owner.

• If the property owner owns multiple parcels, they will all come up and you will then have to select the one you want.

• When you select a property from the list, last year’s tax card will come up, which shows the value of the property last year.