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 Two were subsequently withdrawn.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.

Letter to the Editor: Second Opinion Needed on Reval (March 7, 2019)

Letter: Second opinion needed on reval

MARCH 7, 2019 BY LASZLO PAPP 

Editor, Advertiser:

In his biweekly column in the Advertiser, Chairman John Engel suggested that nothing is wrong with the condo revaluation, but rather he questions if our zoning laws “adequately address an affordable condominium solution.” Having more than 30 years of involvement with our zoning laws, I can state that the Planning & Zoning Commission did and does exactly that. If I may go back a few years: In the 1970s P&Z noticed that the two-family zone does not satisfy the needs and requirements of the citizens. We introduced a cluster zoning, called “Alternate Development” which than evolved into multifamily, later also to apartment zoning. This was the very first “condo” zoning in the area, later followed by other towns.

Back to Mr. Engel’s argument that “the current revaluation is accurate”. He quotes valid statistics that 2018 condos sold for $417 per foot,versus $420 per foot five years ago. This means that in 5 years average condo prices went down 1% and not up 8% to 10% as the revaluation stated. This is very close to the real estate report that the average condo sales price of $ 807,604 in 2014 went down to $ 778,962 in 2018. This proves that the condo revaluation is anything but “accurate.”

What we need is a “second opinion” for a fair condominium valuation!

Laszlo Papp

Election Pause? The Engel Team's Market Report for Connecticut, November 2018

Westport, a little less expensive at $1.33mm, suffers a little bit less, volume down 9% in October and 2% for the year with prices down only 7% for the year.  Wilton where the average house is still under $800k (and condos under $400k), is seeing prices rise 4% (and 13%) for the year despite inventory levels rising 14% (and 33%) Rowayton sees inventory up 13%, prices and volume down. The median closing price fell 28% to $950,000 and the average condo is now only $316,000, down from $1.44 million. Greenwich, Wilton, Westport, Darien and New Canaan Median Prices over 5 years Greenwich had a soft October, but annual volume, prices and inventory are consistent with last year, 419 now for sale and 268 sold. Old Greenwich is up both in October and for the year, reversing a 5-year decline in volume that declined from 96 to only 60 sales in the previous 5 years. Now, sales are back to 70. Riverside is up in October, flat for the year, with fairly consistent volume for 8 years. Cos Cob prices and volume are up for the year, not surprising where the average home is $1.62 million, over $600,000 less than prices in Riverside and Old Greenwich.  Stamford and Norwalk Median Prices  Stamford and Norwalk are trending similarly. Down for the month, but flat for the year. Stamford shows 2 years of consistent sales volume and prices for both houses & condos. Houses remain at $580k, condos at $348k Norwalk shows average house prices holding at $613k while condos slip 6% to $280k despite a huge drop in inventory there of 34%

Hilltop Luxury Under Construction $4.8mm Classic cape with barns & river views (call) Elegant awesome: 507 Silvermine $4.18mm Striking: 269 Dan's Highway $2.3mm Current Listings of the Engel Team: 61 Sturbridge Hill, New Canaan $4.8mm 507 Silvermine Road, New Canaan $4.2mm 27 Rippowam Road, New Canaan $3.2mm 269 Dans Highway (VIDEO) $2.3mm 276 Park Street, New Canaan $1.4mm 921 North Wilton Rd, New Canaan $1.3mmCanaan Close #7 (VIDEO) $1.3mm  309 Park Street (VIDEO) $1.2mm  45 Sunrise Avenue, New Canaan $995k  65 Comstock Hill Ave, Norwalk $995k  88 South Avenue, (VIDEO) $799k  854 North Wilton Road, New Canaan $10k309 Park Street New Canaan $7800/mo 45 Sunrise Avenue, New Canaan $3500/mo

The Engel Team  John Engel, Susan Engel, Melissa Engel And Stephanie Sullivan  Licensed in Connecticut 183 Elm Street, New Canaan, CT 06840  c: 203.858.0266 o: 203.966.7800  EngelTeam@halstead.com  view my listings

November Market Report for New Canaan and Fairfield County

We are having a very good Fall market here in New Canaan, not just in comparison to 2016. This chart makes it apparent that 2014 and 2015 were exceptional years and that 13 sales is more typical.

This chart of cumulative house and condo sales over the last ten years is a more sobering view. 216 single family house sales and 43 condo sales is fairly typical and last year was particularly poor here.

279 Active House listings is too many. This number has doubled from 145 back in 2000 and about 220 in 2013. The number of people in New Canaan has remained unchanged in the last 20 years so why has the number of active listings doubled? A good deal of this has to do with the financial and tax situation in Connecticut. There are many more opportunistic sellers than there were 10 years ago.

The number that jumps out on this chart is the number of closings under $1 million, up 147% year over year.  There is always a buyer for a relatively inexpensive home in this market, given the high quality schools and low taxes. So why did that number jump this year? One factor could be the relatively low number of inexpensive rentals on the market. When faced with limited options to rent many people opted to purchase instead. A second factor is the increase in inventory. Given the record levels of inventory, and the relative stability of prices and low interest rates, buyers did respond.

There is still 6 years of inventory above $5 million. This has to come back into balance. The number of active listings under $1 million is only 41 which makes it unlikely that we can sustain the current level of sales of 52. In the $1-2 million category we have about 1 year of inventory and that is a balanced market. 

Ah, condominiums. The condo market follows the housing market. When houses are selling then it produces buyers for our condo market. As we can see in the chart above there are sales at all levels in the condo market, and the current level of about 4 condo sales per month is consistent with condo performance over the last ten years. We expect that the increased volume in the housing market will result in higher median prices in the condo market.

What's wrong with Greenwich? Nothing. A 5% drop in volume is statistically insignificant because they had a relatively strong year last year. Prices are now $300,000 higher than New Canaan and Darien and this could account for the drop in volume. As I recall the prices were much tighter between the three towns a year ago. What is significant are the large increases in volume in 4 markets and small increases in volume in another 5 markets.

Inventory keeps climbing. While it is true that we're having a brief respite after hitting new records again in 2016, inventory levels are still much too high and reflect a whole generation of opportunistic sellers. Rather than settle into a home for 20 years people are much more willing to regard their primary home as an investment (and take a profit when it is presented).

This chart shows the seasonality of the number of listings is still a factor, with the peak number of listings in June before all of the pending Spring transactions have cleared.

The volatility in the November December months comes from houses coming off of inventory for the Christmas holidays. 

The absorption rate dives between November and January as people take a break from the market and pull their houses off with the expectation of re-listing in February or March. By May everything is back on the market and the number of sales outpaces the addition of new listings.

Ninety five percent is typical for the ratio between listing prices and selling prices. We have found that buyers will not typically make credible opening offers below 90% of asking price and prices tend to settle at the mid-point of the bid and the ask, 95%  What is far more instructive is the ratio to original list price which is consistently below 90% for the first time in recent memory.