Latest Current Market Conditions Posted

OK, folks, I just finished my monthly Current Market Conditions report, with sales data through April. While I wouldn't call the current picture "robust", there are some signs of improvement from the mid-winter doldrums. Closed sales in April were up over February and March and the median sales price appears to have reversed its downward slide, although remains well below the 2007 peaks. The weak link of the data trinity (sales volume, median price and average price) continues to be the "average sales price", which continues to trend downward, largely a function of ongoing softness in the upper end of the market. Please check out the latest report and then drop on back here and post your thoughts on what's happening.

Comments

[Baysider]

David says, "I think we may have seen the bottom in our rearview mirror"

David, I don't think you are realistic in this assumption. Your median may move up in the Spring b/c of the seasonality of the Catskills but ultimately, with unemployment topping at 10.5-11% next year and average or median wages falling, I do not see a true bottom in real estate for at least another 2-3 years. The fundamentals are very poor for real esttae for years to come. The bottom will be in your headlights, David.

"Stay clean until 2013"

[David Knudsen]

Baysider, when you copied and pasted by 'bottom' comment, you left out the second part of the sentence "... at least in some property categories." I also used the word "may". There are lot of unknowns over the next year. Our opinions differ. You're clearly a bear, and should keep your money out of real estate for the time being.

The other key item is that sales aren't moving back up at least year's prices. Far from it. One point I make over and over is that only properties perceived as great values, and primarily in the moderate to affordable range, are generating buyer interest. It's what's being seen all around the country. Buyer confidence is increasing, sure, but it's the meetup of that confidence with lower prices that's generating activity. So while a $400,000 farmhouse gets a big yawn, last year's $350,000 farmhouse that's been cut to $279,000 gets interest.

[keith]

Thought this was quasi related since local school enrollment trends track with what's happening in the real estate market to some extent. I found the magnitude of the past and future school attendance decline quite sobering. I've heard this is happening in much of rural america. I attended Tri-Valley and looking at enrollment in the lower grades, graduation sizes will eventually wane to be roughly equivalent to the mid to late 70's.

http://www.recordonline.com/apps/pbcs.dll/article?AID=/20090511/NEWS/905110318/-1/COMM04

[Helen K]

So why am I paying over $12,000 per year in school taxes for my little summer home in Callicoon?
I see tax revolts coming to a place near you in this country.
Washington riots? LA riots? That was nothing.
Stay tuned!

[David Knudsen]

Helen, a school tax bill of $12,000 a year would mean you're paying $20,000 to $24,000+ in total property taxes. That would reflect a market value of over $1,000,000. If your market value is less than $1M, and you're getting hit with that kind of tax bill, you may want to look into grieving your taxes. And if your house has a market value over $1M, I doubt the house is quite that "little."

[Brad]

I recently received a statement from the local appraiser (Eldred) reducing the apraised value by 25%. This actually is a more realistic valuation. It is not clear however, whether this would lower my property taxes. Does anyone have any information on this topic since this is the time of year to challenge your appraisal I beleive.

Brad

[rod]

Actually, with tax rates close to 4% of property value per year in Callicoon (and most parts of the Sullivan West district), it would only take and assessment of $600,000+/- to be taxed at $24K per year.

There is no hiding the fact that rural Sullivan County has high taxes, especially in the SW school district.

[David Knudsen]

Rod, I don't think your calculation is correct. Most townships set their assessed values at a percentage of market value. In Delaware and Callicoon Townships, it's about 50% of market value. So, while it may be true that tax rates may be 4% of "assessed" value, the assessed value is actually about ha;f of "property value" or market value. The SW school district isn't particularly worse than other districts --- take a look at the Liberty School district for comparison. I see taxes all over the county, and with the exception of anything in Liberty Village or the Liberty School district, as well as the newer construction at Chapin, they all pretty much range between 1.5% to 2% of actual property value across the county. (Neversink is an exception because of the impact of the NYC transfer payments.)

[rod]

David - sorry I have to disagree. You are referring to 2 different things - an assessor's inclination to undervalue a house, and the State's equilization program.

Also, new construction does not benefit as much from outdated (low) assessments, nor do homes that have undergone substantial improvements (ie, drew a building permit). And to rely on an assessor's good nature to under-assess your home (and it's subsequent affordability) - or not reassess it at some point in the future - is not the best approach to financial planning.

Brad - to attempt to answer your question, the reduction in your assessment is the first step in seeing lower taxes. At the moment, the State will increase the equilization for the town, thus negating most of the benefit. But an accurate assessment is a start. Bottomline - the new assessor understands the issues stemming the from the last few years, and the grievance process will be much more fair this year.

[Jeff]

Brad,

I am also a resident of the Town of Highland (just up the road in Yulan) and also received a 25% reduction in my appraisal. The valuations in the town now do bear a closer relationship with reality since the former appraiser was replaced. It had been quite a mess. However, the 25% reduction this year was, I understand, across the board. So it is safe to safe that the property taxes will not fall anywhere near 25%. In fact, your tax bill could go up. Or they could stay the same. It depends on what happens with the budget. Say, for example, that the Town's budget was flat for next year. In order to fund operations, the town would raise the tax rate per dollar of assessed value by 25% to cover the shortfall created by the reduced value of all properties. In this example, your actual tax bill, like the budget, would remain unchanged, even though your appraised value was reduced.

I did participate in the grievance day process two years ago, and was satisfied with the outcome, which dramatically reduced what had been a ridiculously inflated assessment. (My 3-bedroom ranch with lake rights was appraised at a higher level than some giant lakefront homes in the same community.) It's worth a trip to the appraiser's office (in advance of grievance day if you can or, if not, get their very early) to check out what your neighbors' homes are assessed at. If you find that comparable properties are assessed at a lower value, you can make a strong case that your assessment should be reduced. And if you find it's in line with similar homes, you can have the peace of mind that your paying only your fair share.