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Susan Kelty Law: Market Value Assessments Used by Village Hall PDF Print Email

Written by Susan Kelty Law, Associate Broker, Houlihan Lawrence





 

Jan. 7, 2015: In the last eight years, the subject of market value tax assessments has been a hot-button issue for many village homeowners. Some who saw dramatic increases in their taxes as a result of the 2006-2007 reassessment fought to get them reduced, and many were successful, especially after the market decline of 2009. But this year, while many village residents will be happy to hear that median home prices have risen substantially in the last 12 months (about 9 percent for single-family homes and 22 percent for townhouses), Bronxville's market value assessment model actually mandates that those market gains be reflected in the 2015 tax rolls. 

With so many municipalities in Westchester now converting to market value assessment systems, this article attempts to review Bronxville's relatively new system and how it is evolving as market conditions improve.

According to Village Assessor Gerry Iagallo, Bronxville's new tax roll will be published by February 1, 2015. Although he cannot say which homes will see an increase in their assessments, or by how much, Iagallo is predicting an average increase of 11 percent for single-family homes, including townhouses. However, given the way the market value assessment system works, an increase in assessment does not necessarily mean that the tax paid will go up by the same 11 percent.

The good news, according to Iagallo, is that if school and village budgets stay about the same, the actual tax rate per thousand dollars of assessed value should go down because of the increased tax base (this past year's rate was $17 per $1,000 of assessed value). This means that for those who do not receive an increased assessment in 2015, if budgets are constant, their tax liability will actually be decreased.  

And for those whose assessments go up, they will not see the same percentage of increase in taxes owed. Iagallo characterized this new assessment increase as a necessary step in response to a rising market and encourages those who disagree with their assessment this year to avail themselves of the grievance process by filing objections within the prescribed two-week period before February 17, 2015. 

Market Value Assessment Background: In 2006, Bronxville converted to a fair market value approach in order to eliminate the inequities of our old assessment system. Under the old system, newer single-family homes were assessed at higher levels than many older homes with much higher market values, and these under-assessed homes held onto that benefit in perpetuity. The conversion to a fair market value system was expensive--it required the village to individually appraise the market value of each single-family property.

The new assessments were then implemented in 2007, which turned out to be the height of the market for median single-family prices in the village.

Under the current market value system, our assessor is responsible for periodically reviewing the village tax rolls with the goal of keeping assessments at 100 percent of fair market value. While some "market value" towns choose to adjust assessments on a yearly basis, Bronxville's model calls for a revolving assessment readjustment only when the "coefficient of dispersion" (the "COD," or error factor) exceeds 12 percent. The COD is essentially the differential between tax assessments and median market value prices (in the assessment world, a COD of 10 percent or lower is considered ideal).

It is notable that Bronxville is the only jurisdiction in the state that actually wrote the 12 percent COD into its assessment law as a mandate. As a result, unlike other towns that lagged behind the market on their assessment rolls, Bronxville stayed relatively current even in the downturn of 2009. That year, our village assessor took what Mayor Mary Marvin called "prophylactic action" and lowered assessed values by 7 percent across the board to reflect the declining market.

According to assessor Iagallo, while the fair market value system was initially expensive for the village to implement, in a few short years it has more than paid for itself. Since 2005, the increased accuracy of our tax rolls has decreased the number of small claims/ tax certiorari claims (which are very expensive to defend) by about 75 percent. Even coops and condos (which are assessed differently under state law as "commercial" property) have reduced the number of certiorari claims filed on those properties. This article is limited to discussion of single-family home assessments.

Current State of Our Single-Family Tax Assessment Roll: In early 2013, when Bronxville's COD on single-family homes was at 10.5 percent, one of the lowest in the county, our village trustees unanimously adopted a resolution that property values in the village be reviewed either when the COD exceeded 12 percent or, alternatively, every three years when the board thought a review would be beneficial. Pursuant to this resolution, starting in 2013 Iagallo was charged by the trustees with reviewing one-third of the village properties each year for the following three years. As a result, about one-third of village homes had their assessments re-examined last year and increased on average by about 5 percent.

This past year, however, when Iagallo started on year two of the three-year review cycle, he discovered that the still-rising real estate market had pushed the COD up above 12 percent. In order to comply with the mandate, Iagallo said that the "one-third-every-year" approach had to be discarded in favor of the assessor's taking immediate action to reduce the COD. For this reason, Iagallo and his team embarked on a review of the remaining two-thirds of single-family homes this past fall (the ones that were not increased last year). The new assessments are the ones that will be published by February 1, 2015.

While Iagallo cannot estimate at this point how many homes will see increases in their assessments in 2015, he confirmed that most of the two-thirds of single-family homes reviewed will see increases, as well as some additional homes that either underwent capital improvements or sold in 2014 for amounts higher than their assessed values. The rest will stay the same or go down. Multiple Listing Service (MLS) data show that about 85 percent of the 80 townhouses and single-family homes that sold in 2014 sold for varying amounts over their assessed values.

According to Iagallo, the expected $150,000,000 increase in assessments for 2015 translates into an increase of the current total tax base from $2.81 billion to about $2.96 billion. His aim this year is to bring the village assessment COD down to 12 percent or lower. In this way, he hopes that the assessment process can stabilize for a longer period of time.

Like so many of our village officials, assessor Iagallo is always approachable, and he encourages homeowners to ask him any questions they may have about the process. 

Pictured here: Midland Avenue headed north.

Photo by A. Warner

 
Priscilla Toomey: Doing Your Real Estate Homework PDF Print Email

Written by Priscilla Toomey, Associate Broker, Julia B. Fee/Sotheby's International Realty



Dec. 31, 2014: People planning to buy or sell a home often believe things about what is likely to happen that do not necessarily turn out to be true.

Among them can be:

-- I'm in no hurry (what will you do if a buyer or seller appears quickly?)

--I can always get pre-approved quickly (what if the house you want is "hot" and there is an immediate bidding war?)

--I saw the house on the Internet and know it's the one for me (do you know that a steep cliff drops off immediately behind it?)

--Buyers will be able to imagine what the house could look like (if you're lucky--experience tells us perhaps 15% can).

There are many myths of residential real estate, and if the sale or purchase of a home is on your radar screen, it is very helpful to approach the transaction with eyes wide open and with the myths dispelled.

Preparation is the key to a successful outcome. Inventory remains low in many areas, but with mortgage interest rates remaining attractive, serious buyers are in the hunt. Are you prepared to capture them if you're selling--and are you prepared to compete against them if you're buying?

Some tips for sellers:

*Does the certificate of occupancy for your house match what is actually there – number of bedrooms and bathrooms, for instance.

*Have all permits for work you had done been closed out?

*Can you accommodate a buyer's requested closing date--have you figured out where you will go, whether temporarily or permanently?

*Have you studied your local market to have a reasonable idea what price your house would sell for?

*Have you made enough progress yet with the de-cluttering and staging process so that your home shows to its best advantage from the get-go?

Some tips for buyers:

*Are you willing to do "work"--i.e., remodel the kitchen and bathrooms (not just cosmetics)?

*If you are willing to do work, do you have the funds to spend on it or are you better off finding a house that does not need work but may cost more, an expense you may be able to fold into your mortgage.

*Are you pre-approved for the maximum amount you can spend--you can always offer less, get your pre-approval updated, etc. but it can make all the difference to have been vetted by a lender and pre-approved before you seriously start to shop. And keep in mind that a pre-qualification does not carry the same weight with a seller or their real estate professional as a pre-approval.

*Have you studied the area you are interested in thoroughly? Schools, parking, transportation (including "clocking the trip" at the time you would actually be making it), whether the house faces in a direction that gets an amount of light that pleases you, etc.

*Have you studied recent sales of comparable houses in the neighborhood so you have a good idea what to offer when the time comes? A real estate professional can get you these data, a website that publishes estimates cannot.

This homework can seem like a nuisance and it will take some of your time. But in the end, it will pay off in the smoothness and success of what is likely your largest single financial transaction.

Pictured here: Priscilla Toomey, associate broker, JD, ABR, Top5, certified EcoBroker, SRES with Julia B. Fee/Sotheby's International Realty, 2 Park Place, Bronxville, NY 10708; cell, 914-559-8084; e-mail, CLOAKING .

 
Joe Houlihan: Six Reasons Why the Holiday Season Is Good Time to Put Your Home on the Market PDF Print Email

Written by Joe Houlihan, Managing Partner, Houlihan & O'Malley Real Estate

Dec. 3, 2014: When it comes time to put their homes on the market, many sellers think they should wait until after the holidays. However, there are unexpected advantages to listing your home now rather than waiting until the new year.

  1. Motivated Buyers
    'Tis the season! There may be fewer buyers looking, but those who are tend to want to close before the end of the year. Homes often sell faster during the holidays, and for more money. Plus, there's always that buyer who wants to give the ultimate of a new home to a loved one!
     

  2. Less Competition
    Because the holidays can be hectic, sellers often feel they can't handle trying to show their home and juggle everything else, so they take the home off the market or wait until the new year. This means that supply drops significantly, making the houses remaining on the market that much more attractive to buyers.
     

  3. Lower Interest Rates
    Historically, interest rates are cyclically lower from December through January, making it a more appealing time to buy. Additionally, the Fed has held interest rates at zero for nearly six years, and projections for 2015-2016 show that these rates will start to increase.
     

  4. Tax Breaks
    Selling now gets you the gift that keeps on giving--a tax break. If you close before the end of the year, you could be eligible for tax breaks and credits, including deductions for real estate taxes, PMI premiums, and home mortgage interest.
     

  5. Top-Notch, Faster Service
    The stores may be packed, but your Realtor, title companies, banks, and lenders are probably not so busy, so you're more likely to be top priority. Plus, many potential homebuyers have time off from work during the holidays, giving them ample time to search for their new home.
     

  6. Your Home Looks Beautiful
    You can capitalize on the joy of the season by making your home warm and inviting with cheerful, tasteful holiday decorations and festive aromas, such as spiced cider simmering on the stove or freshly baked cookies just out of the oven. This will appeal to the emotions of buyers, leaving them with a memorable impression.

Picture here: Joseph Houlihan, managing partner at Houlihan & O'Malley, 133 Parkway Road, Bronxville. He can be reached in his office at 914-337-7888 or on his cell at 914-645-6640 or by email at CLOAKING

Photo courtesy Laura Mogil

 
Priscilla Toomey on 'Universal Design' for Organizing and Selling Your Home PDF Print Email

Written by Priscilla Toomey, Associate Broker, Julia B. Fee/Sotheby's International Realty


Nov. 5, 2014: While many of us have heard the terms "universal design" and "aging in place," their meanings and implications may be vague to us. They are universal movements and have implications for house design going forward.

Basically, universal design is the concept that spaces should be aesthetically pleasing but also be easy to use by people with (or without) disabilities and by the aging population. A few examples that are commonplace are audio books, slip-resistant surfaces, automatic doors, closed captioned television, curb cuts at corners, low-floor busses, Velcro, cabinets with pull-out shelves, lever handles instead of knobs for opening doors, and no-stair access to housing.

A major benefit of universal design is that it makes it easier for people to continue living in their own homes. We are living with an aging population. By 2030, the US population aged 65 and over is expected to grow to 71.5 million people from about half that number in 2006. More and more people want to "age in place" (AIP) rather than go into assisted living, if at all possible.

Aging in place is a worldwide movement, because populations everywhere are living longer. The idea is to enable people to remain in their own homes as they age by providing resources and support services, rather than having them move into assisted living, which is far more costly and more disruptive. Universal design elements can help them do that, while postponing the need for expensive institutional care.

There are more aging-in-place organizations in Westchester than you may have imagined. There are currently three aging-in-place models in Westchester County and several organizations in different parts of the county encouraging the formation of AIP organizations. One close-by example of an aging in place resource is Gramatan Village in Bronxville.

For legal needs, there are lawyers who specialize in a relatively new field known as "elder law." Real estate agents who are interested in working with older clients can become certified as Seniors Real Estate Specialists (SRES). When you need the expertise of one or the other, it's nice to know they're there.

Pictured here: Priscilla Toomey, associate broker, JD, ABR, Top5, certified EcoBroker, SRES with Julia B. Fee/Sotheby's International Realty; cell, 914-559-8084; e-mail, CLOAKING .

Photo courtesy Julia B. Fee/Sotheby's International Realty

 
Market Report by Priscilla Toomey: A Good Year for Bronxville Real Estate PDF Print Email

Written by Priscilla Toomey, Associate Broker, Julia B. Fee/Sotheby's International Realty

Oct. 8, 2014: As of October 1, there were 23 detached single-family homes on the market in Bronxville Village. The median asking price for those 23 homes was $3,495,000, and the average asking price was $4,046,043. The average asking price at the end of the last quarter was $4,535,263. Fourteen of the 23 homes currently on the market had asking prices above $3 million, though sales above $3 million in Bronxville Village have lagged. Inventory remains low as the traditional after-Labor Day market is a little slow in getting starting.

The story is different for townhouses. There are currently five townhouses on the Bronxville Village market. The average asking price is $1,149,800, with the lowest asking price being $895,000 and the highest, $1,795,000. Townhouse sales have generally been strong in 2014 year-to-date. Each of the three townhouses currently under contract had an asking price above $1 million at the time of contract.

House Sold Year-to-Date

Of the 53 single-family homes that have sold year-to-date in 2014, the median price was $2,195,000, and the average price was $2,181,431. The price per square foot was $625.41. Fourteen of the 53 sold at or above their asking price at the time of sale.

Of the 22 townhouses that have sold through the end of the third quarter, the average selling price was $1,193,568. The price per square foot was $618.36, beginning to approach the average price per square foot for single-family homes. Of this segment, 12 out of the 22, or more than half, closed at or above their asking prices at the time of sale.

No condominium apartments sold during the period. The one condominium townhouse that sold is included with the townhouse sales reported above.

Co-op apartment sales were brisk during the first nine months of 2014, with 32 apartments changing hands in Bronxville Village during the period. Of the apartments that sold, 7 of the 32 sold at or above their asking price at the time of sale. The news here is that the asking and selling prices of the larger apartments (generally 3 bedrooms and above) elicited premium prices and 4 have sold at $1 million or above so far this year.

Overall, though with a few exceptions, it has been a good year for Bronxville Village sellers thus far.

Pictured here: Priscilla Toomey, associate broker, JD, ABR, Top5, certified EcoBroker, SRES with Julia B. Fee/Sotheby's International Realty; cell, 914-559-8084; e-mail, CLOAKING .

Photo courtesy Julia B. Fee/Sotheby's International Realty

 

 
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