Most Douglas County residential property values are projected to increase less than 1 percent in 2008, according to the county appraiser’s office.

The county won’t mail change of value notices until Feb. 29, but the current projection is based on a review of 67 percent of residential properties, County Appraiser Marion Johnson said.

He said it’s the lowest percentage increase he has seen in his 16 years in Douglas County. But it wasn’t a surprise. The values reflect the real estate market, he said.

“If you look at the national market, this market is no different,” Johnson said.

So far, 25 percent of the residential properties are showing a decrease in value, 40 percent are showing no increase and 30 percent are showing a 0 to 1 percent increase, Johnson said. Another 5 percent are seeing an increase of more than 1 percent.

The effect of flat property values on local governments will vary. Property taxes make up 50 percent of the county government’s budget. County leaders will deal with that issue when they start preparing the 2009 budget later this year.

“It will be tough,” County Administrator Craig Weinaug said. “Over the next couple of years (county) commissioners are going to have to say ‘no’ to everything and cut back some existing services or they’ll have to be willing to increase revenues (taxes) to pay for any new things and retain some of the things we have.”

In addition, sales and mortgage taxes are below projections in 2007, and in 2008 the county will start feeling more of an effect from the removal of the state machinery tax.

The city of Lawrence relies on property taxes for about 20 percent of its budget and the school district 100 percent (along with state funds).

The real estate market in Lawrence and Douglas County had an up-and-down year in 2007. Residential sales during the first few months of 2007 were stronger than the last few months, Johnson said. That makes it difficult to estimate property values, he said. The estimates are based on two years of sales (2006 and 2007).

The average sale price in 2007 was $188,500 while it was $184,700 in 2006. But the difficulty in making estimates came with a downturn in prices in the last three months of 2007, Johnson said.

In 2007 there were 1,519 valid residential sales, compared to 1,542 in 2006 and 1,739 in 2005, the appraiser’s office found.

“Older houses that are in the price range people can afford are still in demand,” Johnson said, citing sales of 1,000-square-foot ranch houses in eastern Lawrence.

The county’s housing appraisals will show up on the tax bill of property owners to be sent out in November 2008.

Calculations have not yet been prepared for new houses built but the number of building permits appears to be down as does new-house sales, Johnson said.

“I don’t anticipate a large increase in value from new construction,” he said.

Commercial properties are showing a 2 percent to 4 percent increase. The median commercial increase so far is 2.9 percent, Johnson said.

Final property reviews are expected to be completed by Feb. 1.