Manassas Park residential property values are projected to decline between 30 and 50 percent next fiscal year, leaving the city with an estimated shortfall of about $8 million in fiscal 2010 — more than one-fifth of the city’s $38.9 million budget in fiscal 2009.
City Assessor Richard Sanderson said he “never before” had seen such a big drop in his 20 years of experience, adding that when he worked as the Alexandria assessor in the early 1990s, drops came in groups of 2 percent to 3 percent each year, “not in the 20s and 30s.”
A major reason for the precipitous drop in assessment values was the glut of bank-owned and foreclosed properties sold last year in the city. About 80 percent of home sales between Jan. 1 and Sept. 30 involved properties foreclosed on or resold by banks, Sanderson said.
He said the median home price in Manassas Park was about $350,000 until 2007, while the current median price is between $125,000 and $150,000.
“I think now is a good time to buy,” said Sanderson, though he added that some real estate experts are contending that the bottom of the housing market isn’t going to come until the spring or summer.
Factoring in commercial tax assessments, which haven’t dropped as steeply, city Finance Director Gary Fields is preparing for a 38 percent decline in tax revenue.
Fields said that based on the current tax rate of $1.24 per $100 of assessed value, the school system would take a $4.2 million hit in 2010 and the city $4 million.
“We can’t provide the same services with [a] 38 percent drop in [revenue],” he said.
Sanderson added that the growth in Prince William County in the 1990s attracted a lot of new home construction — too much, in fact.
“Basically, property values went too high, too fast — now, they’re [seeing] a correction,” he said.
But the decline in Manassas Park went beyond that, he said.
“A 30 to 50 percent [decline] is more than a correction — it’s devastating to local governments,” he said.
He added that the city has instituted a number of measures to trim the budget — such as a hiring freeze — since he projected a decline of 22 percent back in August.
