Chairman's View: Revaluation (Dec. 20, 2018)

Chairman’s View: Revaluation

DECEMBER 20, 2018 BY JOHN ENGEL. CHAIRMAN, TOWN COUNCIL

New Canaan’s real estate grand list fell by $570 million (7.15%) compared to 2017.In the recent revaluation:

• 4,861 parcels saw average decreases of 11%.
• 2,308 saw average increases of 13%.
• For homes worth more than $3 million, the average decrease was 14%.
• For $2 million to $3 million homes, the average decrease was 10%.
• For $1 million to $2 million homes, the average decrease was 7%.

Homes less than $1 million saw an average increase of 1%. Multifamily homes decreased 4%. Commercial properties increased an average of 13%. Condominiums increased 9%. 

We will not know what the new mill rate is and the new taxes are until the MuniVal consultation period is complete (this week and first week of January), then the Board of Assessment appeals process is complete (February) and then the (town and school) budget process ends with the Town Council vote April 4, 2019. 

If your revaluation is factually wrong then schedule a meeting this week for early January with MuniVal, the revaluation company and correct the facts (203-292-5500 or newcanaanreval@munival.com). If unsuccessful, then you must appeal in person to the Board of Assessment Appeals with facts about your house and comparable sales that occurred between Oct 1, 2017 and Oct 1, 2018. Appointments are given February 1 to 20 and the appeals take place in March. Sales that fall outside of that 1-year window are considered but carry less weight. 

After the 2013 revaluation the Board of Assessment Appeals increased two assessments and reduced 187 of the 285 appeals filed. Some homeowners appeal alone, others take a Realtor or an attorney. Some attorneys charge by the hour. Others work on contingency, taking a percentage of a successful appeal. If an appeal process is unsuccessful, the recourse is a lawsuit. Five years ago, 13 homeowners filed lawsuits against the town. Two were subsequently withdrawn. It takes three or four years to resolve a lawsuit.

Assuming health care rises 5%, town salaries rise 2.8%, school salaries 2.2% and $2.5 million comes from the general fund I expect expenses to increase 1.47% with “level services” and 1.86% if we follow Board of Finance guidance. Therefore, the mill rate announced in May will be between 18.61 and 18.69. That’s up 10% from 16.96.  A homeowner’s revaluation would have to decrease 9% in order to see a drop in taxes. To calculate your 2019 taxes multiply .01862 by your new valuation. (The spreadsheet is posted at johnengel.com).

Darien is revaluing now. Their assessor predicted most revaluations within 3% or 4% of their previous valuation. He expects the Darien mill rate to remain close to their current 16.08 rate. Wilton, now at 28.19, will send out revaluation letters in early January. Ridgefield’s grand list rose one half of one percent in their February 2018 revaluation, a 28.78 mill rate. Westport’s mill rate has been flat at 16.86 for 2 years and they won’t revalue until 2020. New Canaan experienced a 3% drop in the 2013 (reval) grand list but gained 1% in most years since (up $84 million, $85 million, $81 million, then $51 million in 2017).

Chairman's View: Revaluation and the Condo Market (Feb. 28, 2019)

Chairman’s View: Revaluation and the condo market

FEBRUARY 28, 2019 BY JOHN ENGEL, CHAIRMAN, TOWN COUNCIL

Condominiums rose 9% in value in a 5-year total revaluation that was down 7.19% The average condo owner will see a double-digit increase in their taxes, Specifically, 955 condos will see average increases in taxes of $1,137. Many condo owners are upset. They’re organizing behind their condo presidents saying this is a regressive tax on our seniors and demanding that something be done.

What are our options? New Canaan could have asked the State to throw out the entire revaluation if we had a basis to do so. Or, we can follow the process, appealing assessments individually. Four hundred and ten people have filed appeals, a bit more than f years ago (285), but a little lower than 10 (419) or 15 years ago (421).

Here’s the math: In 2013 47 condos sold at an average price of $798,807 and a median of $760,000. The high end was supporting the market with five sales above $1.2 million in 2013 and six sales over $1.2 million in 2012.

In 2018, 46 condos sold averaging, $778,962 and a median of $690,000. We had only one sale above $1.2 million last year. The high-end of the condo market is struggling. Not so at the bottom end, where demand is strong and prices on a per-foot basis constant.

In 2018 condos sold for $417 per foot and 1.56 times their assessments. Contrast this with five years ago, when they sold for $420 per foot and only 1.32 times their assessments. That multiple of assessment is the key. They are selling for a greater multiple versus their assessments. Their assessments had to catch up. Contrast that 1.56 multiple with houses, which are selling at 1.26 times their assessments.

Why are condos selling? It’s a relatively inexpensive way to buy into the New Canaan school system. And, Darien has far fewer condominiums, only about one-quarter the number we have in New Canaan. In contrast to the single-family house market, the condo market is remarkably consistent, four sales per month for the last 10 years, the result of continued demand for workforce housing, entry-level families and downsizing seniors for only 13% of our housing stock.

Munival, based out of Fairfield, (for $222,000) was New Canaan’s choice instead of choosing Ryan or Vision, both out of Massachusetts. Munival also works for Greenwich, Stamford and Norwalk. Darien chose Munis/Tyler Technologies for about the same price, $209,900 (but without a full inspection on their commercial)

Condos are in demand faster than they are being built, prices on less expensive condos are rising, and if we don’t like that we should ask ourselves if our zoning laws adequately address an affordable condominium solution for the next 10 years. That’s the tool we can use. In my professional opinion as a Realtor and based on these values, the current re-valuation is accurate.

The opinions expressed in Chairman’s View are those of Chairman John Engel and not necessarily those of other Town Council members.