Greater Hartford Real Estate Blog

Property taxes are a sensitive subject in Greater Hartford. Just about every year there is a budget referendum in at least one local town as angry residents fight yet another property tax increase. The debate in some towns is more heated than in others (but we won’t mention any names).

You may be happy to know that rising property taxes are a hot topic in other cities and states as well. An editorial in this weekend’s Wall Street Journal highlights a number of areas that are experiencing increasing taxes at the same time as they see falling home prices. In Arizona, where there is a state property tax, property values have fallen 17% on average in the past year. But taxes are on the rise. Ouch!

Unfortunately the root cause of property tax tension throughout the US is likely to get worse. The economics of running a town are deteriorating. Let’s consider the revenue and expenses separately.

Nearly all of town revenue comes from property taxes. Although real estate has historically been an appreciating asset, that is perhaps not the case today. Let’s assume that property values have stagnated. Therefore town revenue has also stagnated.

Expenses, on the other hand, are rising even more quickly than their historical rates. Education (much of a town’s budget) is rising at 2.5x general inflation, healthcare (another significant piece) is rising at 2.0x general inflation. We all know about energy prices, which impact many of the services the town provides (police, fire, trash pickup, snow plowing, heating city buildings, …).

Revenue is stagnant while expenses are accelerating. We all better sharpen our pitchforks and ready our torches because in the current global economic environment, this dynamic looks like it will only get worse.  Other than protest, is there anything we could or should do?  Or should we just ride it out?  This is shaping up to be a big problem throughout the country.

Yesterday the Hartford Courant published an article related to the number of single family homes for sale (housing inventory) in the Greater Hartford area.

The majority of towns appear to be a buyer’s market, with more than 6 months of inventory available.

But what about the number of single family home sales and the median price for the same timeframe?

Here’s the data, taken from the multiple listing service (deemed reliable, but not guaranteed)…

As you can see by the percentage change in the number of closings when comparing the beginning of last year to the beginning of this year, the majority of towns have noticed a significant slow down in house sales. If all of the towns are consolidated, the number of closings is down 34% when comparing the same timeframe in 2008 to 2007. Ugh.

The median price change is a little less telling. What the change in median price may mean, if it’s negative, is that buyers are purchasing lower priced homes, rather than prices are falling. There may be fewer “move up” sales occurring at the higher prices because the people interested in moving up don’t necessarily want to put their homes on the market right now. They fear they will not get what their home is “worth.”

Unlike the go-go markets of a few years ago, understanding the details is more important than ever. Whether buying or selling, make sure your agent does some research for you before you make any decisions.

I wish it was a day at the park … but there is no park where I can play with other dogs!

Hello all, Libby here.  I’m making Kyle write about our exciting trip to West Hartford Center in hopes that you will also support a town dog park.  The event was organized through the West Hartford Dog Park Coalition, and noted by Amy on Friday.

Dogs of all sizes, and their people, paraded through the Center to raise awareness.

We were all well behaved, patiently waiting to cross the street.

I had a wonderful time and was exhausted by the time we got back to the car.

And when we got back to the house I drank a whole bowl of water before taking a little snooze.

Socializing and meeting new friends is an important part of life. And it is much more difficult without a dog park. How would you like it if you never got to see anyone face-to-face and had to do all of your correspondence through pee-mail?

That’s what I thought. Do the right thing. Libby out.