By MIKE STILL
WISE — Wise County still presents a good real estate market for people and businesses wanting to locate to a rural area, according to county Commissioner of Revenue Doug Mullins Jr.
After a recently finished reassessment of the county’s various commercial, agricultural, industrial and residential properties, Mullins said property values have increased 3% on average. Residential properties saw the bulk of increased values, he said.
“We’ve experienced a seller’s market, and we haven’t seen that since 2009,” Mullins told county officials in January. “And we’ve seen some inflated sales in recent months, but that’s a local bubble that will not sustain itself.”
Almost two months after that presentation, Mullins said international and domestic changes may signal a shift in that market in the coming months.
“My assessors and team could not have foreseen the events of the past few weeks,” Mullins said, as the U.S. faces rising inflation and the Ukraine crisis, “but we did anticipate that there was a bubble in the area’s real estate market that’s not going to last.”
Mullins said it is too soon to see what inflation is doing to the county’s real estate market and values, although there have been sales at the values determined by assessment. Wise County will see approximately $300,000 in new real estate tax revenue this year from the reassessment, and he credited his in-house reassessment staff with a process that has seen no appeals yet over the 28,000 parcels reviewed.
“The Wise County reassessment team is considered one of the most credible in the commonwealth,” said Mullins. “Our assessment captured about 98% of the property values in our market, and I think values have stabilized over the past several months as opposed to 15 months ago.”
Wise County and much of Southwest Virginia are still attractive to those who have considered moving to rural areas, Mullins said. That attraction has grown before as teleworking becomes more prevalent.
“Out of state buyers are recognizing that they have more purchasing power here,” Mullins said. “Prospective buyers see this market as an opportunity to get more acreage and structure square footage than their existing market. We’ve talked to out of state buyers who are thrilled to purchase a $250,000 Wise County property with ample acreage, saying that a comparable property in their respective markets would have cost at least 50% more.”
Signals in recent weeks that the Federal Reserve Board could start implementing interest rate hikes could affect that market demand, he added.
“While we don’t have enough sales data to see how property values are affected, we’re seeing inflation impact auto sales, and that could be a sign of things to come for real estate values in the months ahead,” said Mullins. “That applies not only to rural areas but urban markets too.”
“It’s hard to weigh the positivity of lower prices in this area compared to urban markets against inflation and interest rate hikes,” Mullins said. “While rates might not have an immediate effect on property values, buyers will be facing higher mortgage rates. I predict interest rates will disincentivize buyers in the long run, but it’s hard to tell how much of an impact we’ll see for now.”
“The window is not closed, but it is narrowing,” Mullins said of borrowing rates. “It’s more finite.”
