How King County figures assessments

Excerpts from the blog

Readers are calling to complain about their 2008 King County property assessments.

The upshot: "My assessment went up, but my property value has been going down. What gives?"

What gives is that assessments lag market values by about 18 months, King County Assessor Scott Noble says.

Employees of the King County Tax Advisor's Office spend all day every day explaining the complicated assessment and levy process to confused residents.

I called the King County tax adviser, Barbara Alsheikh, for the explanation.

An assessment does not determine the dollar amount that a property owner pays in taxes. It is a tool that determines a property owner's share of the tax burden, Alsheikh said.

In other words, an assessment determines how big a piece of the pie you get, not how much that piece costs.

The amount of taxes paid comes from budgets and voter-approved levies in each taxing district — the county, cities, school districts, the Port of Seattle, hospital districts, fire districts, etc.

Here's a quick explanation of how assessments are figured in King County: The county is divided into about 100 assessment areas, each comprising homes that share many of the same characteristics, such as view or construction quality.

About 15 percent of the homes in each region sell in a given year, but a half of those are excluded because they are bankruptcies, estate sales, foreclosures or some other deal that is not a market-value sale between a buyer and a seller.

That means that the value of all the properties in a given area are determined by the prices of 7 to 8 percent of the homes in that area.

Values for 2008 were set Jan. 1, based on sales that occurred as long as three years earlier, Alsheikh said, because the process is complicated and takes time.

And while we can look for assessments to go down in 2010 or 2011, we won't necessarily be paying less in taxes. Just so you know.

Questions? Visit the King County Assessor's Web site, www.kingcounty.gov/assessor; or the King County Tax Advisor's Web site, www.metrokc.gov/taxadvisor; or call the Tax Advisor's Office at 206-296-5202.

Fair deal on home loans

Two years ago, it was too easy to get a mortgage. Probably everyone knows someone who got interest-only or piggyback loans to buy a place and now can barely make payments.

When I bought my first house, the maximum mortgage payment could be no more than 25 percent of my gross monthly income, and my monthly bills had to total 36 percent or less. I also had to put 10 percent down or get an FHA loan.

When I bought my second home six years later, the limits were 28 percent (give or take) for the mortgage payment and 40 percent (give or take) for total monthly bills, depending on, oh, the mood of the lender, the time of day, I don't know.

Then I started hearing about lenders who allowed monthly bill payments to total 50 percent or more of gross income.

Lending rules became a very slippery slope. And that was before creative financing and no-doc loans.

Many people who bought homes with subprime, negative-amortization, interest-only or piggyback loans shouldn't have. Many are in foreclosure, looking into short sales, or jumping through hoops to try to refinance into loans they can afford.

I understand the argument that everyone has a right to a piece of the American dream. But I don't agree with it. Look where it got us.

Now the pendulum has swung the other way, and it's hard to get a loan. With stricter lending standards akin to those in the 1980s — more money down for buyers, more equity for refinancers, higher credit scores for all — it's difficult for borrowers to get out of the holes they're in because of mortgages they took out a few years ago.

So I'm curious. What requirements are fair? How much should buyers have to put down? Should all loans have to pay down the principal monthly? If you could set banking policy, what would that policy be?

This material has been edited for print publication.

Cindy Zetts' blog appears Sundays. Reach her at 206-464-2027 or czetts@seattletimes.com.