Hartford Business Journal

8 Hartford Business Journal • March 6, 2017 www.HartfordBusiness.com CT budget weighs on towns, property owners By Gregory Seay gseay@HartfordBusiness.com G ov. Dannel P. Malloy's bien- nial budget proposal calling for tens of millions in aid cuts to the wealthi- est municipalities is already trigger- ing pain for some as well as fears for what it may mean for cur- rent and future prop- erty owners. Whether or not the threat of those cuts and their poten- tial to increase prop- erty taxes hamper the upcoming spring homebuying season remains to be seen. News last week that West Hartford will forgo a $5 mil- lion purchase of UConn's soon-to- be-former suburban campus because its slated to lose mil- lions in state aid sur- prised many in and outside the town. "We're looking at the largest [prop- erty-tax] increase we've ever had,'' said West Hartford Town Manager Ron Van Winkle. Van Winkle, an economist, said losing the opportu- nity to redevelop one of the last remaining open tracts nearest the town's center is only one on a long list of concerns for the town. Another is the potential impact, he said, of steeper property taxes on existing and potential homeowners in West Hartford and elsewhere in the Greater Hartford region. If taxes do rise sharply, Van Winkle said, "people will take a pause to decide whether they want to live there, or whether to downsize." In Glastonbury, Town Manager Rich- ard Johnson said his town faces a cut in its education cost-sharing assistance, from $6.5 million to $148,000, on top of $5 million more it may have to contribute to its teach- ers' retirement. All of that, in addition to enhancing the prospect of rising property taxes, also could mean reductions in town services, Johnson said. Veterinarian Stewart (Chip) Beckett III, Republican chair of Glastonbury's town council, said that, despite Glastonbury's rank as one of Connecticut's wealthiest communi- ties, nine of every 100 pupils in his town quali- fies for reduced-lunch assistance. "To cast a net to say people in town are equally wealthy … I think the legislators ought to be a lot more worried about who they say can afford [a property-tax hike]," said Beckett, who also chairs the Capital Region Council of Governments (CRCOG), whose members include Hartford and surrounding towns. "We need to look at how do we provide the appropriate funding to the appropriate people." West Hartford Realtor Carl Lantz, who is president of the Greater Hartford Association of Realtors, said fears about the impact on housing from the state's fiscal woes don't reflect consumers' resiliency. "I think tax increases are inevitable in most munici- palities,'' Lantz said in response to a recent HBJ Q&A. "I don't see this affecting the residential real estate mar- ket. In this day and age, buyers are much more educated, making them conscious of tax costs and I see the home- buyer really researching what they get for the dollar in each town." One thing that could impact homebuy- ing in the state is talk on the federal level of eliminating the mortgage interest deduc- tion, he said. "People looking to make an investment will still buy homes, but those on the fence may not, and certainly those who are hanging on the edge of affording a purchase would be effected," Lantz said. "I believe the market would be negatively affected if the deduction is eliminated." Malloy has also proposed eliminating the $200 state property tax credit. For his part, however, the Democratic governor has spared cities and towns from budget cuts in the past, despite the state facing contin- ued deficits. This year his budget plan shifts state aid from wealthier to more needy communities. Recently, consumer financial-servicer Bankrate Inc. ranked Connecticut the 27th best state for first-time homebuyers, with Iowa No. 1 and California last. State and local economies and public policy, as well as income and property taxes, combine to impact housing affordability. So far in 2017, Connecticut's residential realty mar- ket has shown positive signs with single-family home sales up 14.2 percent in January compared to a year earlier. The median home sale price also ticked up by 2.2 percent. Meantime, new home construction permits issued in January doubled from a year earlier. n Q&A CT homebuyers looking for renovated properties this spring Q&A talks to Carl Lantz, president of the Greater Hartford Associa- tion of Realtors and a member of RE/MAX Premier Realtors in West Hartford, about the upcoming spring homebuying season. Q: What is your projec- tion for home sales in the coming months? Do you see spring being more for sellers or buyers? A: Many areas in Greater Hartford have lower inventories, which would equate to a seller's market, but buyers that I've worked with are looking for homes that are renovat- ed. We're seeing those listings go into multi- offers, while homes that need updating are sitting on the mar- ket until they hit an advantageous price. Usually, invento- ry picks up with the spring market so I'm sure we will see buyers and sell- ers adjust. With that being said, I think there are and will be oppor- tunities for both homebuyers and sellers this spring. Q: How is Greater Hart- ford's real estate market com- pared to the rest of the state? A: The Greater Hartford real estate market is on the rise. According to CTMLS numbers in Greater Hartford, closed sales and pending sales are up, while the number of new list- ings and sale prices are slightly lower. I think statewide is fol- lowing that trend, with low inventory and stagnant prices, but demand for homes in good shape, or those homes that are priced well for their condition, is strong. Again, once the weath- er turns, I think we'll see more inventory and that should have an impact on sales and prices. Q: There has been talk of eliminating the mortgage deduction on the federal level. Has this affected homebuyers at all? Do you get a sense peo- ple may not be buying homes because of it? A: The housing market is still fragile, and removing the mort- gage interest deduction could put it in further jeopardy. People looking to make an investment will still buy homes, but those on the fence may not, and cer- tainly those who are hanging on the edge of affording a purchase would be effected. I believe the market would be negatively affected if the deduction is eliminated. Q: Gov. Malloy has pro- posed cuts in state aid to lots of towns. How is this going to affect the residential real estate market? A: I think tax increases are inevi- table in most munici- palities so I don't see this affecting the residential real estate market. In this day and age, buyers are much more edu- cated, making them conscious of tax costs and I see the homebuyer really researching what they get for the dollar in each town. I hope municipalities will be held to a tough standard to make sure they are being financially prudent and doing the best they can with our tax dollars. Q: What impact are Millen- nials having on the real estate market as they get older and seek houses? Are they buy- ing more homes or are they still renting? A: Millennials are seeing the value in ownership. More and more are diving in to purchase homes and condominiums. Many who have come from the rental market, like the lower responsi- bility of owning a condominium. They also really seem to be drawn to homes that are updated already and don't need work. The fact that they are buying is helping to push the market for- ward. That allows sellers to buy and afford a larger house, and that helps the market as a whole. Q: How is the business of real estate changing? A: Online presence has become even wider and more important. Nearly all buyers are looking online and there is a lot of infor- mation available about housing styles, prices and loans. Some of that information is inaccurate or misleading so it is important to talk to experts in the field. While some people may think they can buy or sell using the internet on their own, once they get into the process and see the details and complexity involved, I think that buyers and sellers will quickly see the value in using a reputable, well qualified Realtor. n CARL LANTZ President of the Greater Hartford Association of Realtors FOCUS RESIDENTIAL REAL ESTATE CT's Early 2017 Homebuying Performance Jan. 2017 Jan. 2016 % Change CT single-family home sales 2,307 2,020 14.2% CT single-family home median sale price $235,000 $230,000 2.2% CT condo sales 579 468 23.7% CT condo median sale price $155,000 $148,500 4.4% Greater Hartford single-family home sales 777 631 23.1% Greater Hartford home median sale price $197,000 $199,950 -1.5% Greater Hartford condo sales 185 149 24.2% Greater Hartford condo median sale price $135,000 $143,000 -5.6% S O U R C E : C T R E A L T O R S , G R E A T E R H A R T F O R D A S S O C I A T I O N O F R E A L T O R S Stewart (Chip) Beckett III, Republican chair, Glastonbury Town Council Ron Van Winkle, Town Manager, West Hartford P H O T O | H B J F I L E

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