The stability doesn't mean there aren't concerns, Cory tells GlobeSt.com. "We recognize, at least in some areas, that office vacancy is up for the obvious reason that companies have gone out of business and layoffs," he says. "But certain segments such as downtown and southwest, those level of values seem pretty strong." New buildings have gone up in those submarkets, which could boost their values.
Cory draws his conclusions from a review of the data from the district's appraisals, but doesn't have specific figures. The district has sent property owners the annual notice of their 2002 values, which were made from sales and appraisals made in 2001.
In other market segments, Cory says the values of retail and apartment properties are holding up well. He says he was surprised by the apartment market, "but we've gotten some sales that indicate that that's still pretty strong."
Warehouse and hotel properties haven't been as strong as others, according to Cory. The warehouse market, he says, has "had a lot of new product come online and so it could be that we could see some stress there." Hotel properties have lost value as their sales declined in the past year.
Cory, who's seen several real estate cycles, says this one is different than the past two. "In the mid-80s we were in the midst of a boom and then we just woke up one morning and everything had fallen to the floor," he says. The reverse happened in 1990s when "values were going up very, very rapidly.
"In this one we've had some bad economic news, but the turn hasn't been so dramatic as we saw in the mid-80s," he says. "There's been some softening, but not the rapid decline." In fact, he said, values for homes under $500,000 continued to rise.
The stability of real estate values poses a bit of a problem for appraisers. "In the past, it's been moving steadily in one direction or another," Cory says. "Right now it's kind of hard to tell which way it is going. That's made it a little difficult for us to establish values."
The appraisal district determines values mostly by looking at sales. For some commercial properties where the information is available, it looks at property's income.
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