by Deb Alter
Opinions differ on the effect of the water crisis on property values in Hoosick and Hoosick Falls. Local real estate agents, banks, and the Town Assessor have differing perspectives on the question of whether property values are depressed because of the water crisis. [private]It is a complicated issue. To understand it, one must appreciate the differences between different kinds or real estate data, such as assessed property value, listing price, and property sale price.
Both the assessor and appraisers depend on comparable home sales within a recent time frame and in the same or similar neighborhoods, and their valuations are usually fairly conservative. The listing price of a home, on the other hand, is based on what the listing agent recommends and what she thinks the house will sell for based on comparables (comps) and what price the homeowner/seller ultimately decides to put on the house. Listing prices are not valid indicators of a property’s value. The final sale price at closing is the real value of the property.
Town of Hoosick Supervisor Mark Surdam ( a former realtor himself) has spoken to several local realtors, and believes that determining if there has been a drop in home values is a complex issue. In addition to the problem of finding adequate price data, he asks, even if we can determine that prices are down, “how can we know it is because of the water?” He said that looking at the market in general and seeing if real estate values in neighboring towns and villages are up, down, or steady, would be helpful in evaluating Hoosick’s market. But now that the chemical has been discovered in neighboring towns, it might have an impact there also. Surdam said, “I can see this from different angles. If there is, in fact a dip, it should be offset by the fact that the problem has been fixed.”
At the Hoosick Rising meeting on March 22, Mayor Borge said he had told Governor Cuomo that the drop in property values has been about 10-15% in the Town and 20-25% in the Village. James Martinez, president of the Hoosick Federal Credit Union has come to each of the last Town and Village Board meetings and at both he said that was not true. “There are no facts to support a drop in property values. It is too soon to make that statement. Everything appears to be normal. New listings are at or above assessed values,” he said.
Jim Brown, President of The Bank of Bennington, said that the bank does not have enough information yet to ascertain whether values have gone down. “As more sales happen, we can build a history and make a determination,” he said. That bank, along with Trustco, had stopped lending for Hoosick and Hoosick Falls Properties until filters were installed and the water was declared safe; they are both lending now. With the water fixed, he thinks that there will be an uptick in listings and sales, and when supply and demand come into balance, they will have a better take on the market. He believes that appraisers will be cautious, taking the water issue and state superfund designation into account when calculating the value of a property, but he did not know whether that would have a negative affect or not.
Therese Myers at Key Bank, which, like The Hoosick Federal Credit Union, continued to lend throughout the crisis, said they are handling mortgages as they always have. “Our typical process is stringent, so it’s business as usual,” she said.
Adrienne Fraser, an agent at Denim and Deeds Real Estate, said she has not seen a drop in home prices. She said listings are up, primarily because people who make the decision to move during the winter put their houses up for sale in the spring, when buyers typically start looking. Though many people assumed that prices would drop, she was not surprised that they hadn’t, because “we had a fix for it as soon as we found out about it.” Gale Leva, also of Denim and Deeds agreed. “At first everyone thought that property values would go down fast,” she said, “but I’ve changed my mind. We have to give it more time.”
She continued, “People here will continue to buy, it’s their community, but there might be a stigma about the water to outsiders, and the media isn’t helping.” Leva thinks that stigma will go away as soon as the media starts reporting that the water is the best in the state.
Rick Tinkham of Team Tinkham/Berkshire Hathaway Home Services said he doesn’t want to skew things in a positive or negative way, he just wants to be realistic. He agreed that there are many factors involved. He said properties are still selling, but he has seen a drop in home sale prices since the crisis hit. He cited several examples of homes that have sold for less than the pre-crisis appraised value both in the Town and the Village. He mentioned a home in the Village that is listed at $31,000 less than its appraised value which has seen almost no activity; only one buyer has even looked at it. Another house in the Village he had listed was taken off the market because it is now appraised for about $20,000 less than before the water crisis.
Tinkham said the market is starting to climb again. He said, “In about six months, Hoosick will be back to a positive place.The dip in home prices has hurt people who want to sell now the most; they are in the toughest situation because if they have to sell now, they have to sell for less.” Tinkham said that mortgage lenders have acknowledged that values have dropped. He said anything that might change the value of a property must be included in the appraisal. Since the water crisis began, the PFOAs and the Superfund designation must be included in the report. Banks want to make sure that their investment (mortgage on a property) will hold its value.
Kendal Baker, a realtor with Marker’s Octagon Realty, has seen a noticeable, but modest, dip in home prices, and that, anecdotally speaking, sales were a little weaker. He said that he thought properties might not have been selling due to the uncertainty about the water. Because of all the media attention, potential buyers have lots of questions concerning the water, and it has been a negative deciding factor for some. However, others see it as a buying opportunity. “Some people are more panicky that others,” he said. Baker noted that now that the water is clean and spring has arrived, he is already seeing a rise in potential homebuyers and, hopefully, sales. He said that the fact that Trustco and the Bank of Bennington are lending again is a good sign of confidence in Hoosick Falls.
Town Assessor Tony Rice sees it from a different point of view. When he talks about property values, he is referring to the assessed value for tax purposes, not sale prices. From his perspective, property values have not dropped. He determines a property’s value on the yearly Valuation Date, which is July first in any given year, and the value based on the amount from the previous valuation date. For instance, assessments on the 2016 assessment roll are based on the value of the property as of July 1, 2015. At that time the PFOA crisis had not yet hit the community hard, so in the Assessor’s calculations, it did not affect the value of a property for this year’s assessments. He expects that by the time next year’s Valuation Day rolls around, the full-capacity filters will be up and running and perhaps there will be progress on finding a new water source, so the worst of the crisis will be past, at least as it pertains to home values.
The truth is, it will be much easier to judge the effect of the water crisis on property values a year from now, when experts can look back and assess the market with more data available. Anecdotally, most realtors seem to think there has been some downward pressure on property values, but it’s hard to quantify, and the market seems to be rebounding with the filters in place and the Spring coming on.[/private]