Archive for February, 2008
West Hartford Dog Park?
Libby here. I like car rides but, frankly, I’m tired of going all the way to Wethersfield to play at the Dog Park. Why can’t there be one closer to my home? Parks are plentiful in Hartford and West Hartford. Couldn’t we section off an acre or so for dogs to run and play in a safe, legal environment?
I have heard that a group of proactive dog owners have gotten together to explore the possibilities of starting a dog park in West Hartford. They have even started a Google group to coordinate efforts. You should go check out the website. My friend, Radley, is the mascot.
Amy said that she’s going to meet all of the dog people at their first official meeting on Monday, March 10th. They’ll be gathering at West Hartford’s Elmwood Community Center, 1106 New Britain Avenue, in the multipurpose room from 6:30pm-8:30pm.
You should think about joining them. Don’t you love your dog?
Now, gimme a biscuit!
Libby out.
Will West Hartford’s Property Tax Phase-In End?
There have been rumblings around the West Hartford community recently that the 5-year phase-in for property taxes may be phased-out for the 2008-2009 budget year. Two weeks ago I called the town’s Assessor’s office about this, but they claimed they had no indication that the 5 year phase-in would end.
Well, today the Hartford Courant published an article about the possibility that West Hartford would end the phase-in, accelerating the tax increase, which would presumably shift more of the tax burden from residential property owners to commercial property owners. But will this shift really happen? Much of it will depend on the town’s budget and how much, if any, increase occurs for the 2008-2009 budget year.
The article mentions that the town still needs to crunch the numbers to determine if the phase-in will stay or go. This uncertainty raises some significant questions for the local real estate market, as buyers and sellers are kept in the dark on the tax situation for the next month or so. My major questions/concerns are…
1. What do I tell buyers thinking about the West Hartford market when they ask me about taxes on a specific house? Will they go up? Will they go down? By how much? Are we talking another 4% increase that we saw last year? Or more? Or less? This is important information when considering a person’s monthly housing allowance. Believe it or not, this uncertainty will stall buyers from making a decision and may actually cause them to start looking at other towns.
2. For investment property owners, will their taxes increase? Will they be able to pass the increase on to the renter? If not, will the owner be able to afford this increase? Will maintenance be deferred because there is an unexpected tax burden? Is this going to make the rental market in West Hartford even less affordable?
3. What happens to the commercial property owners that forecasted leases based on the 5-year tax phase-in? If the leases are net leases (where the tenant pays expenses), will the tenant be able to handle a significant increase if the phase-in is abandoned? If the lease is a gross lease (the commercial property owner pays the expenses), have the property owners rented the space at high enough rates to cover unexpected increases in the tax burden?
Uncertainty regarding expenses is frustrating for just about everyone. The proposed town budget will be presented to the West Hartford Town Council on Tuesday, March 11. The Town Council must adopt the budget at their meeting on Tuesday, April 22.
Interested in learning more about West Hartford taxes and the budget? You might want to go to the next West Hartford Taxpayers Association meeting on February 27, which will be held at 7:00PM in Room 400 at the West Hartford Town Hall.
Mortgage Rates (Inflation vs Recession)
I see articles about interest rates going down every time I scan the business news. Either the Federal Reserve just cut rates or Wall Street is demanding further cuts. Yet after briefly going down, mortgage rates are again on the rise. What gives?
The key to this mystery is that mortgage rates are based on long-term interest rates (like the 10-year Treasury rate) rather than the short term rates that Federal Reserve influences. Short-term and long-term rates often move in the same direction, but not always. And our current economic environment is an example of when they go their separate ways.
The US economy is at a crossroads. Growth is slowing and the talking heads cannot agree about whether we are headed towards a recession or something far less serious. This debate is important because it plays a big role in the direction of the long-term interest rates, and therefore the mortgage rates.
With the Federal Reserve aggressively cutting short-term rates, they are signaling that they believe a recession is the biggest risk and are working hard to avoid it. If they are correct, then consumer and business spending will continue to fall and the low interest rates will be an important factor in stabilizing and eventually increasing spending. According to this view, the long-term interest rates and mortgage rates should be going down with the short-term rates.
The long-term rates are not going down because enough investors are convinced that the economy is going to make it through this slowdown just fine - they believe that the Fed’s rate cuts are unnecessary. In this scenario the low short-term rates cause spending to increase too quickly, which puts upward pressure on prices (like gas and food), leading to general inflation.
So if you are planning to buy a home in today’s environment and are looking for a better rate, you want to cheer every time someone mentions recession. As crazy as that sounds.