Last week's Reminder contained a full page advertisement entitled "Town Collector's Notice of Taking" which according to Longmeadow Town Collector of Taxes, Mary Pequignot is required by law before the town places a lien on the property at the Registry of Deeds. Notices and letters had already been sent to the property owners. The Comm Pres notation with this notice is the money owed through the Community Preservation Act.
For those Buzz readers who did not see this ad, it contained a list of 19 property owners with owed FY2010 taxes ranging from $81 --> $6700.
In 2010 there were 11 foreclosures in Longmeadow according to filings at the Hampden County Register of Deeds. This compares to 1 foreclosure in 2009 and 1 in 2008.
A comparison of Longmeadow home foreclosures in 2010 with surrounding towns showed the following:
Longmeadow- 11; East Longmeadow- 11; Hampden- 5; Wilbraham- 17; Agawam- 32
I believe that these foreclosure numbers do not show the real financial stress on Longmeadow homeowners. Analysis of the real estate results from last year show that there was likely a pretty high level of "short sales" of properties in Longmeadow wherein the bank accepted less than what was owed on the property and so the owner was able to sell to an interested party at a bargain price.
In addition, a large percentage of homes were sold in Longmeadow at prices below the official assessment value continuing a trend that has been in place for the past two years. In 2010 49% of the homes (86 out of 158) were sold below the current assessed value. For the final three months (Oct --> Dec) 73% of the homes (22 out of 30) were sold below the current assessed value. In 2010, 10 homes were sold at greater than $100,000 below assessed value.
I believe that these foreclosure numbers do not show the real financial stress on Longmeadow homeowners. Analysis of the real estate results from last year show that there was likely a pretty high level of "short sales" of properties in Longmeadow wherein the bank accepted less than what was owed on the property and so the owner was able to sell to an interested party at a bargain price.
In addition, a large percentage of homes were sold in Longmeadow at prices below the official assessment value continuing a trend that has been in place for the past two years. In 2010 49% of the homes (86 out of 158) were sold below the current assessed value. For the final three months (Oct --> Dec) 73% of the homes (22 out of 30) were sold below the current assessed value. In 2010, 10 homes were sold at greater than $100,000 below assessed value.
Anyone who has tried to sell a home in Longmeadow (or anywhere else) knows how difficult it is. Because of this difficulty, there are many homes in Longmeadow that are being rented (or are vacant). In many cases, rents being paid do not adequately cover the homeowner (or landlord) costs.
This information was obtained at the Hampden County Registry of Deeds at: http://registryofdeeds.co.hampden.ma.us/ which has a free public database that anyone can access.
The Longmeadow Select Board, School Committee and School Building Committee should consider the above information when making decisions about Longmeadow spending.
3 comments:
These are dangerous waters that municipalities like Longmeadow are wading into. I strongly suspect that property values in general are not done pulling back, and Longmeadow in particular is still bubbliciously priced as sellers valiantly try to resist the downward price pressures.
I bought my Longmeadow house pre-bubble in 1998. I got 4 beds/2.5 baths for $197k, and my property taxes back then were $3400/year. Since then, the taxes have almost doubled--but I promise you that the house would never fetch almost $400k if for sale today.
I strongly suspect that we are eventually going back to late-1990s pricing for houses before all is said and done.
If I am correct in my prediction, I will be very curious to find out how our town plans to maintain the property taxes at anything even remotely approaching current levels. And if they can't....then what?
Charles Hugh Smith wrote an insightful blog post on just this topic:
http://www.oftwominds.com/blogmar11/property-tax-rebellion3-11.html
Over the past 25 years Longmeadow property taxes rise on average about 4% per year (despite prop 2.5) - at that rate you can expect your property tax to DOUBLE every 14 years.
Longmeadow Property taxes are holding homeowners hostage, very few will buy into paying the rate and the homeowners will have to lower their asking price in order to escape -- Slowly the school population will decline and teachers will be let go moderating the tax burden - but it will be painful until there is some sort of recovery or optimism in the economy
Agreed.
Last time I looked, the average Longmeadow tax bill was something like $6,000 per year or thereabouts. From a buyer's perspective, that's $500/month just for the "T" in the PITI (Principal/Interest/Taxes/Insurance)calulation for their mortgage payment. Now add to that the fact that mortgage rates have nowhere to go but up from here, and the first "I" will start to eat more of the monthly payment. That means that "P" is going to have to come down enough to compensate.
Of course, that's if you can find a buyer who can qualify for a high-$ mortgage nowadays. GSE lending limits are probably not going to be extended again like last year...I'm not sure what the Fannie/Freddie max is for Hampden County, but I suspect that towns like Longmeadow and Wilbraham will feel the pinch from that, since it will be much tougher to qualify buyers for high $ mortgages. I expect we'll see some form of seller financing start to take hold in an effort to maintain pricing.
I'm not so sure we'll see a population drop from these changes--in fact, it may go the other way. There's a lot of large houses around town that could be renovated into duplexes to make them more affordable by providing rental income. Another option for the trapped/strapped homeowners would be to rent out one or more bedrooms "boarding house style"....although that arrangement probably wouldn't bring more children into the town. But converting to duplexes certainly would.
Don't think it can't happen--if the economic pressures get too tough, people will do what they have to do in order to in order to make that monthly nut for their mortgage payment. Maintenance and heating costs for these big old houses is only going to get more expensive going forward, and if you can't sell the house for what you owe...well, folks will start getting creative.
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