Quad-Cities area home prices surged in 2020, despite the pandemic, fueled by record low interest rates, reduced local inventory and increased demand.
And the trend has continued into 2021.
As a result, a majority of Scott County homeowners will see a 5% to 8.5% increase in their property assessments this year, on average.
"It's probably double what we've seen in any one-year increase in recent years," Scott County Assessor Tom McManus said, adding a 3% to 5% increase has been a typical average in recent years, depending on location.
"But the local real estate market is really hot right now. Ask any realtor," McManus said. "There is unprecedented, historical high markets right now. Unprecedented. Real estate has never been this high."
The Scott County Assessor's Office sent out notices earlier this month of the property assessment increases. The Davenport City Assessor's office plans on sending out roughly 33,000 assessment notices Wednesday.
By law, assessors are mandated to adjust assessed values to follow local real estate market trends every two years, in odd-numbered years.
Iowa law requires assessed values to represent the actual fair market value of property, or what a property would sell for on the open market, within a 5% margin of the median sale price of all arms-length sales of similar property in the prior year.
The 2021 assessment will be the basis for property taxes payable in the fall of 2022 and spring of 2023.
Assessors can use their discretion to adjust property assessments for individual cities, neighborhoods, subdivisions or properties to reflect local real estate market trends.
Otherwise, all properties would be subject to a blanket equalization order by the Iowa Department of Revenue. Such an order would set assessed values for all properties within a certain classification by a certain percentage to attain the mandated median ratio, "whether individual properties need the full adjustment or not," McManus said.
The latest data from the Federal Housing Finance Authority shows a 3.73% increase in home prices for the Davenport-Moline-Rock Island metro area from the prior year and a 15.47% increase over the past five years. Nationwide, home prices increased nearly 11% from the prior year.
"We definitely are seeing homes selling for more than they used to sell," said Caroline Ruhl, CEO of Ruhl & Ruhl Realtors. "We are seeing multiple offers in many situations. When I look at our data, regionally across the board, homes have sold for 6% more than a year ago. When I look at just the Quad-Cities, Illinois was up 8% and Iowa was up 4%. Generally, what we see is lower-price homes appreciate more than higher-priced homes.
"It's supply and demand, and there are a lot more buyers for under $250,000 homes," Ruhl said. "I don't see 8.5% across the board, but certainly 8.5% for part of the market," particularly in Bettendorf.
"Because there's absolutely no inventory," she said. "Everybody seems to want to be in Bettendorf right now."
What property owners can expect
Individual property assessment changes will vary based on location, condition, size, amenities and other factors.
But, overall, 2020 sale prices were well-above 2020 assessed values for most classes, resulting in increases in Jan. 1 assessed values.
In Scott County, the average residential property increased by about 8.5% county-wide. Condominium, town home, apartment and other multi-family residential property increased county-wide by about 13%. Commercial and industrial property increased an average of about 6.5% county-wide.
In the city of Davenport, the average residential property increased by about 5% to 6% city-wide, with minor adjustments to commercial and multi-family residential property, City Assessor Nick Van Camp said.
"The derecho also had some effect on it, where people were replacing siding and roofs, but the biggest cause for the reason why we are seeing an uptick in values is due to the fact with the low interest rates and lack of inventory out there on the market is driving up the cost," Van Camp said. "And we have to maintain market value on these homes."
Van Camp said other city and county assessors across the state had seen the same trend, with property assessment increases between 7% and 10%.
What if I think the assessment is wrong?
Property owners who believe their assessment is too high — above what the property would likely sell for — can contact the county and city assessor’s office to request an informal review to discuss their assessment and request an adjustment from appraisal staff from April 2 through April 25.
For more information, contact the Scott County Assessor's Office at 563-326-8635 or email email@example.com.
The Davenport City Assessor's Office can be reached at 563-326-8659 or email Nick.VanCamp@davenportiowa.com.