Hartford Business Journal

14 Hartford Business Journal • January 30, 2017 www.HartfordBusiness.com Wade: Interstate insurance sales a challenge Like many, Insurance Commissioner Katharine Wade isn't yet sure what impact President Donald Trump's executive order aimed at Obamacare could have on Con- necticut's healthcare market. The Jan. 20 order, Trump's first following his inauguration, is seen as an initial step towards repealing the healthcare law, which would require Congressional action. The order instructs federal agencies to "minimize the unwarranted eco- nomic and regulatory burdens" of the law on consumers, insurers, providers and others. It also calls on agencies to "encourage the development of a free and open market in inter- state commerce for the offering of healthcare ser- vices and health insurance," which could signal Trump's intent to pursue policies that allow health insurers to sell products across state borders. In a recent interview, Wade said she is tracking the new administration's insur- ance-related actions closely, but isn't yet certain how to interpret the executive order. "We're all trying to understand the direction that's coming from the admin- istration and what the implications are," Wade said. Both Wade and Gov. Dannel Malloy, who appointed her nearly two years ago, wrote to Republican leaders earlier this month urging caution in repealing the law, which has helped reduce Connecticut's uninsured rate to less than 4 percent. Since Republicans haven't revealed exactly what policies they hope will replace Obamacare, uncertainty remains. But Wade did cast doubt on the idea of health insurers selling policies to residents of states in which they are not licensed — something the National Association of Insurance Commission- ers is against. "It could be very challenging," Wade said, noting that details of any potential federal proposal remain sparse. Several states, including Maine and Rhode Island, have already passed their own laws allowing for interstate sales, but no insurers have started doing it, according to a report this month by State- line, the news division of the Pew Chari- table Trusts. "States have not really done anything with it," Wade said. Pew said insurers haven't been inter- ested because it's costly to build up new provider networks. And while Trump has pitched inter- state sales as a way to reduce premiums, they could actually have the opposite effect, depending on the fate of Obam- acare, Pew argued. If out-of-state insurers are not bound by the coverage standards of the states they are entering, it could allow them to offer cheaper plans, drawing away health- ier customers and driving up premiums for sicker customers, Pew said. – Matt Pilon Insurance Commissioner Katharine Wade REPORTER'S NOTEBOOK houses sized 4,000 square feet and larger say units in that seg- ment not only are tak- ing longer to sell, but generally do so way under their original asking prices. West Hartford residential broker John Lepore and other realty observ- ers cite changing buy- ers' tastes in which younger Millennials eschew expansive, multi-room dwellings in favor of smaller hous- es and apartments in or near downtown. Con- sumer concerns about Hartford's fiscal health, which bears directly on the city's property-tax rate to fund schools, police and fire protection, and other municipal services, too, factor in the diminished demand, observers say. "It's impacting the saleability at least for larger homes,'' said Lepore, of Berkshire Hathaway HomeServices New England. Hartford City Assessor John Philip also has noted the trend of fewer sales of large city houses, particularly in its West End, bordering West Hartford. Overall, Philip said that the city's 2016 revaluation showed "residential values in general were a drag on grand list growth." To underscore the trend, Philip and other experts point to what's described as the immaculately updated mansion at 150 Scar- borough St., in the city's West End, which recently sold after languishing on the market for nearly three years. The 11,000-square-foot, seven-bedroom, eight full-bathroom dwelling on 2.34 acres originally was listed in May 19, 2014, with a $3.1 million asking price. It closed in early January at $775,525. Its property tax bill cur- rently is around $45,000. Broker Rob Giuffria, of Tea Leaf Realty in West Hartford, said his search of Multiple Listing Service (MLS) data for Connecticut houses for sale found just seven Hartford houses listed above $500,000 that were sold in the past 12 months, through this January, at a median price of $120 per square foot. But in the previous 12 months, through Jan. 2016, only five city houses above $500,000 sold at a median price of $138 per square foot, Giuffria said. Hartford's declining jumbo home values are in contrast to those in several neighbor- ing communities, where median house prices for larger properties have been stable. West Hartford, for example, recorded 102 sales of houses priced at $500,000 and up at a median $186 a square foot between Jan. 12, 2016 and Jan. 13, 2017 vs. the 90 dwellings in that price category that sold for $190 a square foot the previous 12-month period, Giuffria said, citing MLS data. Avon, also based on MLS data, had 101 sales of houses priced $500,000 or more at a median of $160 a square foot between Jan. 12, 2016 and Jan. 13, 2017 vs. 96 sold at a median of $161 a square foot in the year-ago period. "It's safe to say … Hartford's [home price per foot] has decreased at a greater rate than those two surrounding towns,'' Giuffria said. Meantime, Hartford's commercial proper- ty values have increased significantly, accord- ing to a preliminary analysis of an Oct. 2016 revaluation by the assessor's office, thanks to new developments recasting former vacant properties into habitable apartments and/or retail and office space, and more residents and business tenants filling up space downtown. Market factors School quality remains a top priority among potential homebuyers, but the perception lin- gers that Hartford's schools are less so, Giuf- fria said. But that aside, "in general it's harder to sell big homes in all towns because con- spicuous consumption is out of vogue,'' he said. "It's a change in behavior,'' Giuffria said. "Even younger buyers who can afford bigger homes aren't buying them.'' Another cloud over Hartford's jumbo-house market, he said, stems from a row between the city and mostly unrelated residents — eight adults, three kids — living together in another home at 68 Scarborough St. The city sued, claiming the arrangement violated its residential zoning code. But last October, it withdrew its suit against the so- called "Scarborough 11,'' who described themselves as "intentional family." "[Hartford] Planning & Zoning needs to come out one way or another on how they're going to treat the definition of 'intentional family,' '' Giuffria said, "so buyers can make a decision on whether they want to buy there.'' As with almost any property, there is a point at which potential buyers will set aside their concerns if the price is right, Lepore said. He noted his recent sale of a West End house — "not one of the mansions" — on North Beacon Street. Within a week of listing, the house went under contract at $4,000 less than its $579,000 asking price, the broker said. "Like all trends,'' Lepore said, "things are never permanent.'' n from page 1 Consumers eye smaller homes John Lepore, of Berkshire Hathaway HomeServices New England, says buyers' changing tastes, coupled with concerns about Hartford's fiscal health and its impact on education, police and fire protection, and other city services have throttled consumer demand for large, "jumbo'' homes in the city's West End. This Scarborough Street mansion in the city's West End recently sold for a quarter of its original $3.1 million original asking price after three years on the market, brokers say. 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