Denver area homeowners will likely find a good-news bad-news story waiting when they open their mailboxes next week to receive their updated property valuations, released Wednesday by nine metro area county assessors.

The good news is that their homes will show a nice appreciation over the past two years. The bad news is that their property tax bills in 2024, computed using those assessed values as a major coefficient, could take a sizable jump. Assessments are up 33% on the median home in the city of Denver, and a whopping 47% on the median home in Douglas County.

All nine metro area counties show double-digit increases in median value that followed the red-hot real estate market of 2021 and early 2022. Property valuations in Colorado are carried out in odd-numbered years every two years, seeking the rise and fall in values over the course of a year-and-a-half span that ended the previous June.

That means that the new numbers that tax collectors will use next year will register the sizable runup in values that homeowners appreciated through the market’s peak in spring 2022, but little or none of any drop-off in values as the market cooled later in the year.

“The peak was right before appraisal date, which means many of our assessments will be higher,” Douglas County Assessor Toby Damisch told The Denver Gazette. He added that some homeowners would doubtless be looking at their assessed value and saying: “I don’t think I can sell my house for that now.”

Damisch and other assessors point out that although for some people the assessed value may be a little higher than the current market, fixed assessment periods work the other way, too.

“The last appraisals were that way,” he said, noting that the previous assessment period that ended in June 2020 largely missed the big price runup that directly followed, brought on with the arrival of the Covid-19 pandemic when home prices rose nationwide.

After homeowners receive their valuations (they’re set to be mailed before May 1), they can examine the specific sales in their own market areas that influenced their number. They’ll have until June 8 to appeal their assessment if they find it unjustified.

But assessors expect that homebuyers will be expecting higher values.

“People knew their values were low already,” Damisch said, noting that the county saw a record low number of homeowners who filed appeals following that previous assessment.

Officials at Denver’s Department of Finance, which released the metro-wide report, were quick to point out that trends vary by submarkets, and that the composite numbers don’t accurately reflect them.

Median home price valuation can be skewed upward in a particular county by the amount of home construction activity going on, said Arapahoe County Assessor P.K. Kaiser — where the increase in median price was a higher-than-average 42%.

The county is continuing to see considerable homebuilding activity along the I-70 corridor east of Denver, where newly emerging areas offer a chance for affordability that remains rare around Denver, despite a national drop-off in housing prices that has resulted from higher interest rates. New construction typically reflects a higher cost-per-foot than existing homes to begin with; and registers a big jump in value from undeveloped land to finished land.

Even now, first-time buyers in Colorado face the fourth-highest down payment prices in the entire nation, according to a new report from Moneywise.

Meanwhile, more affordable areas of Arapahoe County — including cities of Aurora, Littleton, and Englewood — also show higher rates of increase in value than more expensive areas like Cherry Hills Village and Greenwood Village, said Kaiser.

“The lower end is still hot,” he said. “We’re seeing properties in the affordable range sell in four or five days again,” said Douglas County’s Damisch. “It seems like the action is picking up.”

Damisch notes that although the lagged timing of the reports may deliver assessed values that are higher than the market supports now, the disparity is nothing like it was following the

assessment in 2009, which measured values in 2007 and 2008 but were released after the Great Recession had arrived. The gap between when the data were tallied and when homeowners saw their values reflected an entire year when the economy had fallen apart.

“It’s not nearly that severe this year,” Damisch said.

The new numbers released Wednesday skewed higher for Adams County as well, up 38% over the previous assessment; for Broomfield, up 41%; and for Larimer County, up 40%. In addition to Denver (up 33%), homeowners saw the lowest increases in Boulder County (up 35%), Elbert County (up 35%) and Jefferson County, (up 36.5%).

County assessors also valued commercial properties, which showed a parallel rise in valuations, and apartment properties, which registered a wider fluctuation. Apartments and similar multifamily properties rose from a low of 20% recorded in Arapahoe and Jefferson Counties, to 45% in the city of Denver.

The final tax bills for 2024 will figure the assessors’ certified values as one coefficient, against an assessment rate determined by the Colorado Legislature and a local mill levy rate set by local authorities. Actual taxes that residents are assessed in 2024 can’t be projected until late this year when the other rates are released.

“We understand what a significant percentage change some of our homeowners and business owners may face in value,” Denver City and County Assessor Keith Erffmeyer said in a statement released with the report. “We do not know yet what property taxes will be and while we work hard to do a thorough assessment, we want property owners to take a close look at what they receive and tell us if they believe we haven’t gotten their value right.”

Assessors in surrounding counties said that the Colorado Legislature has a responsibility to soften the blow for homeowners before actual taxes are assessed.

“While I am disappointed that the legislature has not yet acted to moderate the effect values will have on taxes, there is every indication it will do so before tax bills are mailed early next year,” Jefferson County Assessor Scot Kersgaard said in the release. Values on the median home in Jeffco came in at 36% — “a big number,” Kersgaard said.

Colorado legislators have been widely expected to deliver some moderating reform tempering property tax increases, following their 2020 repeal of the Gallagher Amendment, which had served as a tax restraint ever since its enactment in 1982.

In 2022, Gov. Polis signed a $700 million cut in property taxes spread over two years, that had reduced the taxable value of homes by $15,000. But some assessors consider that a very small adjustment with respect to the runup in assessed values this year.

“In my view, there should be no tax rate anywhere that allows them to increase at this rate,” said Douglas County’s Damisch. “The legislature needs to act.”

Many of the counties provide a way to appeal the assessment online, including via a QR code on some. All accept written appeals, either mailed or dropped off at county offices.

Arapahoe County’s Kaiser said the county will also provide video-conference meetings with assessors, and special drop-offs in some areas where residents may have a harder time returning an appeal.

“We’re taking the assessor’s office to you,” he said.