Friday, November 12, 2004

Property values continue to spiral

Property values continue to spiral
By Rick Holland/ Staff Writer
Friday, November 12, 2004

George Moody has been around for decades as the town's chief assessor, but he confesses he's never seen the kind of gravity-defying real estate market that Brookline property owners currently find themselves in.
"Usually, you'll see a pattern in property values like waves in an ocean; they go up and down," said Moody.
Yet having concluded a survey of property sales in 2003 and the first six months of 2004, Moody expressed disbelief at ever-increasing property price tags. "When is this [real estate] bubble going to burst or level? The trend is been nothing but up, up, up," he said.
As a result of Brookline's boffo real estate market, Moody told the Board of Selectmen earlier this week that all condominiums, along with single, two- and three-family properties, would have their assessed values hiked by 7 percent for the fiscal year ending June 30, 2005.
For apartment and commercial properties, however, the assessments will climb by 10 percent in fiscal 2005, thanks to several factors among which Moody said were "some increase in commercial rent prices ... and a slightly stronger market for apartments." The assessed values come into play as one of two numbers needed to determine property taxes each year.
A property's assessed value is multiplied by the tax rate, a calculation that produces an owner's property tax bill for the year. Selectmen will vote later this month to set the tax rate, but Moody said that it "will go down" for fiscal 2005. "Whenever you have an increase in assessed value, there's a decrease in the tax rate," said Moody.
From fiscal 2003 to fiscal 2004, for example, rising property values sent the tax rate down from $11.21 per $1,000 of a property's value, to $10.63 per $1,000.
While this year's adjustments to residential properties will increase assessments by 7 percent across the board, Moody said that 2005 would be a revaluation year for the town. Revaluations involve examining properties neighborhood by neighborhood - an exercise that results in a range of adjustments to assessed values, rather than a one-size-fits-all rate, such as this year's figure of 7 percent.
Moody said that as long as sellers are finding buyers willing to pay prices that in some cases are 20 percent higher than assessed values, "that kind of surge makes real estate the only thing you can invest in to get those kinds of returns."
But Harold Petersen, a professor of economics at Boston College and member of Brookline's Board of Assessors, is wary of the property price boom.
"People begin to see housing as the way to get rich, said Petersen. "People believe that housing prices never fall. That belief continues to fuel buying. But at some point, it stops."
Staff Writer Andrew Lightman contributed to this report.


At 3:20 PM, Anonymous Anonymous said...

I have noticed a lot of Short Sales lately. Who generally looses the most, bank or seller? tia

At 9:44 PM, Anonymous Anonymous said...

Can you clarify what you meant about the rising Short Sales?


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