December Contracts: Making Up For November
December single-family contracts came in at 357 for Hartford County, which was slightly higher that the number of deals that came together in November.
December is traditionally the slowest month of the year, so having it outpace any other month is a bit of a surprise. We think that the usually large snow storm, which was felt through the beginning of November, worked to push some business into the year’s final month.
This December also showed an uptick in activity compared to December of 2010. The number of homes that went under contract this past month is nearly 10% higher than the total from the previous year. It’s difficult to know how much of this observation can also be attributed to the snow storm. Our feeling is that it is not a result that we should read too much meaning into.
Results were well distributed at the town level, though not over as extreme a range as we have seen in previous months. More interesting is that the number of homes actively for sale has come down to about 6.6 months worth of inventory. It was at 7.3 months in the November report, and peaked at 8.8 months in the June report.
Inventory levels should be lower at the beginning of the year. Many sellers take their properties off the market over the holidays so they don’t have to worry about keeping their home in “show condition” and accommodating visits from potential buyers. New listings will begin to come on the market at a steady pace, and the pace will increase as we get through the winter and closer to the traditional spring real estate season.
We’re working on our 2012 real estate predictions, and will hope to have some more analysis of 2011 available in the coming weeks.
Incandescent Light Bulbs
The incandescent light bulb. Once a symbol of American ingenuity, it is now under attack as a wasteful.
Just about everyone I know has strong feelings about the incandescent. Most prefer the light they provide. Most would also agree that they are inefficient compared to compact fluorescent lamp (CFL) and light emitting diode (LED) technologies. Some argue that the newer technologies are inferior due to their color spectrum and their turn on time, though both of those characteristics have been improving with each generation of the technologies. Others are just turned off by the higher prices of the newer bulbs.
Congress got involved with the Energy Independence and Security Act of 2007, which was supposed to take effect at the beginning of 2012. The plan was to gradually halt the production of incandescents starting with the 100W bulb this year. The 75W would have been phased out in 2013, and the 60W and 40W in 2014. However, action by Congress during December of 2011 has effectively pushed out the start date until October 2012.
I have two perspectives on the matter. At the personal level, I think that efficiency is important and have been testing out the various CFL products for years. They were very poor at first, and I think they earned their bad reputation. Some of the newer bulbs I’ve bought have been much better, almost as good as the incandescents. I do still have a problem with the smaller specialty bulbs that are visible. Coiled CFLs just don’t look right in a nice chandelier, and I haven’t been impressed with the performance of “decorative” CFLs I’ve bought.
At the professional level I am a really big fan of incandescents. I’ve shown buyers enough homes to know that they are always more impressed with a property well lit by incandescents than they are by CFLs. One issue is that the quality of the CFLs vary depending on which generation technology the sellers have. So it’s common to see older CFLs that play right into the negative stereotype, which gets a buyer thinking about the lighting instead of the house.
My main recommendation at this point is to sellers. No matter how you feel about the different bulb technologies, you will make your home sell faster, and potentially for more money, by replacing all your CFL bulbs with warm incandescents. Think of it as part of the staging process, and remember that you can pack up your CFLs to bring to your new home.
A Hidden House
Ever since we lived in the Boston area, I have been interested in homes that were set back off the road on a lot that doesn’t have any real street frontage. I like to call them hidden houses. Take a look at this picture, can you see the house tucked between and behind the two on the street?
What I find interesting about hidden houses is that they each have an interesting story. How did they get there? Are they newer or older than the houses that surround them? If they’re newer, when did they get built and how was the building lot created?
There are many hidden houses in Greater Hartford if you know where to look. Our first example, in the above picture, is in the northern part of West Hartford. It was built in 2002, and is much newer than the 1950s vintage homes that surround it. The lot is just over an acre, large for West Hartford, and is set in the middle of an oversized block just off Main Street. Two other homeowners control an additional 2.1 acres (combined) of undeveloped land adjacent to this property.
It looks like this home is a very private set-up, yet still in a convenient location within town. The lot has its own driveway, which appears to be an easement over the home on the left’s property. And the undeveloped land behind the home probably gives it a really different feel from your typical West Hartford property.
Resolutions for 2012
Dear Amy and Kyle,
I hope you had enjoyable holidays. Based on the number of parties you attended and all of the comings and goings I saw and heard about, it seems that you were festive and merry. Good for you.
Recently I’ve been listening to you banter back and forth about potential New Year’s resolutions for 2012. Lose some weight. Read more. Spend less time watching TV. You know, the kinds of things that all humans consider as worthwhile endeavors at the beginning of every year, only to quit them within a few weeks.
Well, as you know, I just turned 100 years old in 2011. I thought it might be a good idea to come up with my own resolutions for 2012, seeing as I’m heading into my next century of being and all. I haven’t really had resolutions in the past, but I see this as good of a time as any to start. Since I’m a house and don’t really have income or moveable limbs in order to help myself, you’re going to need to assist me with these items. I figure it’s the least you can do since you live within my walls and keep me busy on a daily basis. In no particular order, here’s what I’d like to work on for 2012:
1. Be less dusty. I know you have a kid and a Labrador, but maybe this can be a mutual goal. Dust me more and you can lose some weight?
2. Have fewer weeds in my garden beds. Again, seems like a mutual goal. You lose more weight, I keep my self respect with the neighboring properties.
3. Get some insulation. Kyle keeps the heat really low and I’m freezing my bum off. If you can swing it, I would also appreciate a new furnace and hot water heater. I’ve been doing some research for you which I can pass along if you’d like…
4. Watch less HGTV. Honestly, I’m getting a complex by listening to the whiney people on TV talk about new homes with open floor plans, granite counters and remodeled bathrooms. Why aren’t old houses ever good enough?
These seem simple enough, if you ask me. I consider these goals the least you can do given all that I do for you. So raise your dust rags and weeding implements, here’s to a happy and successful 2012!
Warm regards,
Your House
Hartford Revaluation 2011 – Mill Rate Estimate
Thursday’s Hartford Courant contained an article and photo gallery projecting possible tax bills for a number of different properties in the City of Hartford. Their story contained just enough information to figure out what their model of the revaluation’s results say about the mill rate and residential assessment ratio.
The Courant is projecting that the three property classes will have assessment ratios of 70% for commercial, 50% for apartments (which now includes four-family buildings) and 30.6% for residential (condos, single-families, two-families and three-families). They expect the mill rate to be somewhere between 76 and 77, and used 76.79 in their calculations.
Hartford property owners interested in estimating what their July 2012 property taxes based on this model can use the following formula:
So for a residential property this comes out to be…
… which is about the same as …
Owners of commercial and apartment properties would need to start with the first formula and plug in the appropriate assessment ratio.
Since we are still in the early stages of the revaluation process, this is a rough estimate and a lot can still change before tax bills go out at the end of June of next year.
Thoughts & Observations
The most challenging part of modeling the Hartford tax system is getting the residential assessment ratio correct. For the coming year it is supposed to be set so that the overall tax burden of residential property class increases by 3.5%. That was a compromise agreed to by the various stakeholders last spring and passed into law by the state legislature. The primary article attributes the 30ish percent assessment ratio to City Assessor John Philip, and lead author Jenna Carlesso confirmed that he provided that number.
The Courant is forecasting that the mill rate will actually increase under the new system. This is a bit of a surprise since the City’s overall goal is to start reducing the mill rate in order to help attract more businesses.
Although it seems counter-intuitive, it’s okay if the mill rate rises. The data clearly shows that the tax burdens for commercial property owners is decreasing, which is more important than the perception caused by the slightly higher mill rate. In the previous system we had an additional layer of complexity called the Business Surcharge – an additional tax over and above the standard tax – that is now gone. The City has taken an important first step to making the commercial mill rate directly comparable to other towns in the state.
Since the City Assessor has not come out with an official set of projections, we think it is important to continue to develop our own model on what could happen. We’ll keep trying to get data from the Assessor and hopefully have a second set of projections to share in the coming weeks.
Presumably the Courant team succeeded in getting additional information from Assessor Philip as inputs to their model. In thinking about repeating the calculation on our own, we don’t see any way to accurately do it without knowing the aggregate market values for each property class for both last year and this year. Last spring the previous City Assessor provided us a good amount of information, but not the breakdown of the residential class. Since the rules of the game changed to move four-families from the residential assessment bucket to the apartment bucket, we would need to calculate the impact of that change before being able to distribute the tax burden correctly and arrive at a potential mill rate.
Using the Courant’s Data to Calculate Their Projected Mill Rate
For those that are curious, here’s how we used the data that the Courant published to back into the mill rate and residential assessment ratio they are projecting.
After inputting all the data into a spreadsheet, we focused on the commercial and apartment properties. We knew the assessment ratios, so we were able to calculate the assumed mill rate. Once we knew the mill rate, we were able to use that in the residential properties to calculate the assessment ratio. Fortunately the values were consistent across all 9 properties once rounding errors were considered.
Here is our table, the cells with blue text are inputs while the cells with black text are calculations.
Related Posts
Hartford’s Revaluation 2011 – Update
Overview of Hartford’s Property Tax System