2015 Hartford County Single-Family Sales Data

2015 was a good year for Hartford County real estate. The total number of closed single-family sales recorded in the Connecticut Multiple Listings Service (CTMLS) database was 7,701 (as of 1/6/2016).

2016-01-06 Hartford County Single Family Sales

The number of closed sales increased by 9% over the 2014 total. As the above chart shows, the market is approaching the activity levels seen in the early 2000s. The 7,701 sales are over 14% below the 2005 peak.

The increase in sales have not been equally distributed across price bands. Most of the increases have been at price points of less than $400,000, with essentially no increase in sales above $400,000.

2016-01-06 Hartford County Single Family Sales by Price Band

Year end is a good time to look at pricing trends. The chart below updates the annual calculation of median and average home prices. Although the number of sales has increased over the past few years, prices have been falling.

2016-01-06 Hartford County Single Family Prices

The big picture summary is that the region’s real estate market is still working through the impact of the financial crisis. The good news is that interest level is increasing, as shown by the increase in deals. On the other hand, prices are still adjusting downwards to look for a bottom.

We’re looking forward to seeing what 2016 brings … feel free to reach out to us if you have questions or would like more information.

November Contracts: Winding Down

The Hartford County single-family real estate market finished November with 574 contracts. The total was 7% higher than November 2014, and was 13% ahead of 2014 on a year-to-date basis.

Hartford County Single Family Contracts in November 2015

Trends that we have discussed throughout the year continued to hold. Activity grew more strongly at the lower price points, and the inventory of available homes increased as the price point increased. The only price band that experienced fewer deals than in 2014 (on a year-to-date basis) was the $1,000,000+ band, which dropped from 49 contracts to 40 contracts.

We have reached the time of the year when most of the buyers that are out looking for real estate are serious about finding a new place to live. December shoppers are often relocating to the area for jobs, or are making other important life changes. We are seeing both in the market right now.

The unseasonably warm weather should help extend the real estate market further into December. Sellers have been less inclined to pull their homes off the market than in past years when there was already snow on the ground. And casual buyers might be willing to continue their search for another couple weeks since it’s still actually nice to go outside. We will take advantage of the opportunity to hopefully sell some more homes before calling it a year.

Happy holidays everyone, enjoy the season!

Hartford County Single Family Contracts in November 2015 by Town

Hartford’s Property Tax Task Force Report

In June of 2013 the City established a Task Force “for the purpose of examining and analyzing Hartford’s property tax system, and making recommendations for State legislation to rectify imbalances resulting from the system.”
We follow the City’s property tax system closely, and the Task Force’s recently released final report makes this a good opportunity to quickly review Hartford’s current tax situation, analyze the recommendations of the Task Force and share our thoughts.

Steg

Hartford’s property taxes are calculated differently than those of all other Connecticut municipalities. Special legislation at the state level allows the City to assess taxes at different rates to different property classes. The effect is to shift a portion of the property tax burden away from residential property owners (condos, single-family, two-family and three-family) and towards commercial property owners. Owners of larger residential buildings (four or more apartment units) are currently seeing their protections quickly phased out. Shifting of the tax burden to protect residential owners has been occurring in one form or another for over 30 years.

The Task Force’s Report

The Task Force was a small group containing community members who are knowledgeable about the issues, and who have previously worked together to create and guide the City’s tax structure. They met weekly beginning in the fall to study the issue and debate potential solutions. Their report notes that the City needs to grow its Grand List (increase its taxable property), but that the high mill rate and the high percentage of tax-exempt property are impediments to achieving that goal.

The Task Force tried to identify strategies to reduce the mill rate, which would hopefully encourage private development of taxable property, without dramatically increasing the tax burden on the residential class of property owners. The primary recommendation is to slowly phase out the protection that the residential class receives.

Our reading is that they are proposing a 30 year process to equalize the assessment ratios across all property types. This strategy is a modification of the legislation that the City is already operating under. There is currently a mechanism for phasing out a portion of the residential protection each year that is triggered by increases in the City budget. However, the calculation is very complicated and the timeline is open-ended. Debate about the current law motivated the business community to promote clarifying legislation during recent sessions. The Task Force’s proposal would simplify the calculation, providing clarity and certainty to the phase out.

The report makes a number of additional recommendations targeted at some of the property owner groups within the City. For example, they propose allowing tax fixing agreements to help smaller apartment and commercial properties, and allowing monthly tax payments for both small commercial taxpayers and elderly taxpayers.

There are also recommendations that attempt to address tax delinquency and tax avoidance. The Task Force encourages legislation that would allow the City to look further back in trying to collect overdue vehicle and business property taxes, and enable the City to withhold state tax refunds to compensate for back taxes. One recommendation that doesn’t require legislative action at the state level is to more vigorously identify residents who register their cars elsewhere.

Finally, and importantly, the Task Force recommends that the City work with other stakeholders in the region to look for additional opportunities. They mention other City Task Forces, past and present, and regional initiatives that started at the state level.

What Does it Mean for Homeowners?

There is nothing in the Tax Force’s recommendations that radically change the environment for homeowners. We feel that their main proposal, a 30 year phase out of the protected tax status of residential property owners, is best understood as a clarification of the rules we are currently using.

The underlying hope in following this strategy is that the economy will improve over time so that the mill rate can decrease organically. If the economy doesn’t improve, if there isn’t new private investment in the City, then this strategy will gradually raise residential property taxes over time. Either way, it is unlikely that homeowners will see their tax burden skyrocket over a short period of time, which has historically been the concern when state legislation is discussed.

The other recommendations of the task force seem like they are either ideas about how the City could enhance the tax process or help individual taxpayers manage their tax burdens more effectively. They are all reasonable ideas, and worth discussing, though some seem more practical than others. The Task Force did a nice job bringing forward both a concrete proposal on the phase out and numerous other ideas for discussion.

It’s difficult to know how successful the Task Force was in identifying opportunities to reduce the mill rate. The report does not attempt to quantify the impact of their various suggestions, either individually or in total. Additionally, the property tax only contributed about 33% of the City’s total revenue for the year ending June 30, 2012 (the most recent year for which audited financial statements are available). The Task Force points out that there are important factors on the expense side of the equation, showing that they understand that their scope is limited.

Our biggest concern with this plan is that it requires fiscal discipline on the part of the futures mayors and the members of the City Council. The slow phase out of the tax protection for residential owners will likely cause overall property tax revenue to increase slightly each year. City leaders will then have to decide if they want to use that additional revenue to incrementally reduce the mill rate, or spend the money. Without long-term thinking, collective discipline and an explicit focus on City expenses, it is easy to imagine the municipal government growing instead of the mill rate falling.

We have learned that the Hartford City Council will convene a Committee of the Whole meeting on Tuesday, February 4th, 2014 to discuss Hartford’s legislative agenda for the upcoming state legislative session. The meeting will be held at 6:30 in Council Chambers at 550 Main Street. We cannot find any mention of the meeting on the City’s website, but believe that the Tax Task Force Recommendations will be a primary topic of discussion.

 
Related Information
Summary of Hartford’s Property Tax System
January 22, 2014 Tax Task Force Recommendations

Town-by-Town Sales Data for 2013

Last week we published some charts showing the direction of the overall single-family market in Hartford County for 2013. The quick summary was that sales activity has been increasing nicely for two years, but median prices have been stuck in a protracted valley.

The data tells a variety of different stories when we zoom in to the individual towns. Before we get there though, a quick disclaimer. It’s difficult to take too strong a position about any single data point without looking more deeply into what is happening in the town. We’re going from 7,000+ data points on the year at the County level down to a small percentage of that number for most towns. With that, here is the table showing each town.

2013 Year End Single-Family Stats by Town

The results are incredibly varied:

  • East Granby saw the deal count increase 44% and the median sales price rise by 9%.
  • The towns with the 2nd through 8th largest increases in deal count had median prices either remain virtually unchanged or decrease.
  • Avon and Granby both exactly matched 2012 in terms of deal count, and both saw the median price rises.
  • Simsbury remained basically unchanged in each metric.
  • Only five towns had their number of successful closings decrease in 2013.
  • Hartland, Marlborough and Farmington were the only three towns with negative deal count growth and negative median price change.

The markets in each town have their own story to tell. In order to understand what’s happening, the mix of homes that sold, and the level of distress in the market, must both be considered. One could imagine that the multiple towns with large increases in deal count but falling median prices were highly impacted by distressed sales.

We have a model that lets us more easily visualize the numbers for each town, organizing the raw sales data into various charts and tables. I doubt we’ll post the charts, there are far too many, so please feel free to reach out to us if you have specific questions about what is going on in a particular town. We are happy to share.

October Contracts: The Fall Market Arrives

The fall market that we were expecting to see, and then wrote off when it didn’t turn up, magically appeared in October. There were 678 contracts written during the month, which is a 15% increase over October of 2012 and a meaningful step up in activity from last month.

Hartford County Single Family Contracts in October 2013

Contract data at the individual town level continued to bounce around. Bloomfield and Bristol had big reversals of fortune from the September report, showing just how inconsistent small sample sizes can be. In addition to those two towns, Glastonbury, Manchester, New Britain, Suffield and West Hartford all had double-digit increases in the number of contracts that came together in the year-over-year comparisons.

What will November bring? This is typically the month when there is a sharp decline in contracts as buyers and sellers turn their attention to the holidays. Will the October excitement spill over into November? And this year Thanksgiving is very late in the month – will that mean a smaller decline?

Hartford County Single Family Contracts in October 2013 by Town