Town of Manchester, 2011 Revaluation

1. Town of Manchester, 2011 Revaluation

2. This revaluation updates assessment values in order to reflect changes in real estate values since Manchester’s last revaluation date of October 1, 2006. The amount of taxes the Town must raise is a function of the budget process. Revaluation changes the amount that each individual taxpayer pays, but Revaluation does not change the total amount of taxes raised by the Town.

3. Connecticut municipalities are heavily dependent on property taxes as the primary means for financing municipal operations. The data collection phase is different than it was in the 2006 revaluation. By Statute, 2011 is a “full, measure and list” revaluation, meaning all of the nearly 19,000 properties in Manchester are being visited and re-measured.

4. The last full, measure and list revaluation in Manchester prior to 2011 was the October 1, 2000 revaluation. The rest of the process is the same in the 2011 revaluation as it was in the 2006 revaluation.

5. The mandated assessment ratio is 70% of the market value, meaning that your assessment will be equal to 70% of the estimated full market value. Connecticut General Statutes current require that Connecticut municipalities conduct a revaluation every FIVE years.

6. The first tax bills that will be calculated using the 2011 revaluation will be due in July of 2012. Preliminary revaluation notices should be sent in November 2011. It is important that people do notestimate their taxes after revaluation by using their after-revaluation assessment and the before-revaluation mill rate. The mill rate will change.

7. The next revaluation after the 2011 revaluation is currently scheduled to be in 2016. The primary purpose of a revaluation is to re-adjust assessments to current market values because property values differ over time, and different types of properties in different areas do not change equally in value over time, this means that inequalities in assessments build up. These inequalities are addressed through revaluation.

8. Vision Appraisal Technology (Vision Appraisal Technology is in process of changing their name to Vision Government Solutions) In order to assist the Town of Manchester with the revaluation process, Vision was hired through an RFP process.

9. Preliminary Real Estate and Sales Analysis (sales data is not finalized at this point)

10. Residential properties make up nearly 90% of the real estate accounts in Manchester: # ofresidential real estate parcels in Manchester = 16,739 (89.89%) # of non-residential real estate parcels in Manchester = 1,883 (10.11%) Total # of real estate parcels in Manchester = 18,622 (100.00%)

11. Preliminary Sales Data

12. Appreciation rates are calculated using sales from January 1, 2010 through March 31, 2011 and comparing them to their 2006 appraised values. In both the 2000 and 2006 revaluations, almost half of the real estate properties in Manchester were valued at between $100,000 and $149,900.

13. All value ranges within the residential assessment database have shown negative appreciation (i.e. depreciation) since the 2006 revaluation. Depreciation has been the highest at the highest value level. Depreciation has been the lowest at the lowest value levels.

14. There have been 495 qualified, residential properties in Manchester that sold between January 2010 and March 31, 2011. This represents nearly 3.00% of the residential parcel count. For the same time period prior to our 2006 revaluation, there were over 1,000 qualified, residential sales.

15. There have been far fewer commercial or industrial sales in between January 2010 and March 2011 in Manchester. Of the 1,883 non-residential properties in Manchester, only 23 (1.22%) sold within that time period.

16. Commercial sales have shown a much greater disparity in their depreciation rates, with 10 of the 23 sales (nearly 44%) selling for over 10% less than their 2006 appraised value, and eight of the 23 sales (nearly 35%) selling for over 10% more than their 2006 appraised value.

17. Analysis of commercial property rental data shows an increase in vacancy rates, and a decrease in rental rates on a per square foot basis. We are anticipating a very wide range in the commercial and industrial value changes, while some may show appreciation, most will not, and some may show depreciation of 10% to 20% or more.

18. Although most of the recently sold properties indicate that the real estate market has shown depreciation since the 2006 revaluation, in general depreciation levels have been less than what has been seen in the national real estate market, and generally less than most people would suspect.

19. With what appears to be modest depreciation in the residential market, and a very spotty commercial and industrial sales and rental market, it seems likely residential properties will bear a proportionately greater share of the Grand List, and thus provide a greater share of the real estate taxes than was the case in 2006. This is commonly referred to as a “burden shift.”

20. By comparison to other markets across the country, the market in Connecticut, and in Manchester in particular, has actually performed quite well. As the national news has shown, there are regions in this country, such as parts of California, Nevada, Arizona, and Florida, where residential properties have depreciated by as much as 30%, 40% or even 50%.

23. Sale Property Examples A good means of comparison to determine potential revaluation impact is to examine properties that have recently sold, particularly if they sold around the time of our previous revaluation as well.

24. The real estate market now is much more difficult to analyze than prior to our 2006 revaluation, there are far fewer sales occurring and trends are not nearly as clearly established. For the purposes of the sale property examples, this year’s budget is used, with a projected general fund mill rate, so no change in budget is projected, this may or may not prove accurate.

25. Sale Property Example #1: Single Family Dwelling, $190,000 sale price

26. Location: Parker Street area, Manchester, CT • 1,229 SF Cape Cod with 7 rooms, 3 bedrooms, 2.0 bathrooms. The house was built in 1951 and has gas, forced hot water heat and no air conditioning. The house sits on a 0.25-acre (10,890+ SF) lot. • The Town of Manchester’s estimated market value for this house as of 10/1/2006 was $185,000. • This house sold on 3/27/2006 for $186,500. This house sold on 6/7/2010 for $190,000 • The 6/7/2010 price represents an appreciation rate of 2.70% from the 10/1/2006 value. • General Fund taxes before revaluation: $3,649.31 • Projected General Fund tax range after revaluation: $3,920 to $4,190 (increase 7% to 15%)

27. Sale Property Example #2: Single Family Dwelling, $180,000 sale price

28. Location: Hilliard Street/Middle Turnpike West area, Manchester, CT • 1,164 SF Ranch with 5 rooms, 3 bedrooms, 1.0 bathrooms. The house was built in 1957 and has oil, forced hot water heat and unit air conditioning. The house sits on a 0.22-acre (9,583+ SF) lot. • The Town of Manchester’s estimated market value for this house as of 10/1/2006 was $194,500. • This house sold on 12/18/2006 for $207,000. This house sold on 1/24/2011 for $180,000. • The 1/24/2011 price represents an appreciation rate of -7.46% from the 10/1/2006 value. • General Fund taxes before revaluation: $3,838.12 • Projected General Fund tax range after revaluation: $3,720 to $3,970 (decrease 3% to increase 3%)

29. Sale Property Example #3: Single Family Dwelling, $375,000 sale price

30. Location: Keeney Street area, Manchester, CT • 2,920 SF Colonial with 9 rooms, 3 bedrooms, 2.5 bathrooms. The house was built in 2002 and has gas, forced hot air heat and central conditioning. The house sits on a 0.41-acre (17,860+ SF) lot. • The Town of Manchester’s estimated market value for this house as of 10/1/2006 was $406,700. • This house sold on 11/17/2006 for $399,000. This house sold on 3/24/2010 for $375,000. • The 3/24/2010 price represents an appreciation rate of -7.79% from the 10/1/2006 value. • General Fund taxes before revaluation: $8,022.86 • Projected General Fund tax range after revaluation: $7,740 to $8,270 (decrease 4% to increase 3%)

31. Sale Property Example #4: Single Family Dwelling, $219,500 sale price

32. Location: Gardner Street area, Manchester, CT • 1,500 SF Colonial with 6 rooms, 3 bedrooms, 2.0 bathrooms. The house was built in 2000 and has gas, forced hot water heat and no air conditioning. The house sits on a 0.31 acre (13,504+ SF) lot. • The Town of Manchester’s estimated market value for this house as of 10/1/2006 was $254,200. • This house sold on 7/14/2006 for $247,450. This house sold on 5/21/2010 for $219,500. • The 5/21/2010 price represents an appreciation rate of -13.65% from the 10/1/2006 value. • General Fund taxes before revaluation: $5,013.22 • Projected General Fund tax range after revaluation: $4,530 to $4,840 (decrease 10% to 4%)

33. Sale Property Example #5: Two-Family Dwelling, $163,000 sale price

34. Location: West Center Street area, Manchester, CT • 2,051 SF Two-family dwelling with 8 rooms, 4 bedrooms, 2.5 bathrooms. The house was built in 1897 and has oil, forced hot water heat and no air conditioning. The house sits on a 0.25-acre (10,890+ SF) lot. • The Town of Manchester’s estimated market value for this house as of 10/1/2006 was $210,400. • This house sold on 12/20/2005 for $225,000, it was foreclosed, sold, then sold again on 1/25/2011 for $163,000. • The 1/25/2011 price represents an appreciation rate of -22.53% from the 10/1/2006 value. • General Fund taxes before revaluation: $4,150.92 • Projected General Fund tax range after revaluation: $3,370 to $3,600 (decrease 19% to 13%)

35. Sale Property Example #6: Four-Family Dwelling, $198,000 sale price

36. Location: Green Road area, Manchester, CT • 3,992 SF Four-family dwelling with 12 rooms, 6 bedrooms, 4.0 bathrooms. The house was built in 1917 and has gas, steam-fired heat an no air conditioning. The house sits on a 0.28-acre (12,197+ SF) lot. • The Town of Manchester’s estimated market value for this property as of 10/1/2006 was $338,800. • This property sold on 5/22/2007 for $340,000. This Property sold on 9/27/2010 for $198,000. • The 9/27/2010 price represents an appreciation rate of -41.56% from the 10/1/2006 value. • General Fund taxes before revaluation: $6,684.30 • Projected General Fund tax range after revaluation: $4,090 to $4,370 (decrease 39% to 35%)

37. Sale Property Example #7: Residential Condominium Unit, $172,000 sale price

38. Location: Oakland Street area, Manchester, CT • 1,197 SF Condominium unit with 4 rooms, 2 bedrooms, 1.5 bathrooms. The unit was built in 2002 and has gas, forced hot air heat and central air conditioning. The land is owned in-common. • The Town of Manchester’s estimated market value for this unit as of 10/1/2006 was $179,200 • This unit sold on 6/2/2006 for $190,000. This unit sold on 12/22/2010 for $172,000. • The 12/22/2010 price represents an appreciation rate of -4.02% from the 10/1/2006 value. • General Fund taxes before revaluation: $3,536.60 • Projected General Fund tax range after revaluation: $3,550 to $3,790 (increase 0.38% to 7%)

39. Sale Property Example #8: Residential Condominium Unit, $54,000 sale price

40. Location: Center Street area, Manchester, CT • 734 SF Condominium unit with 3 rooms, 1 bedrooms, 1.0 bathrooms. The unit was built in 1969 and has electric, baseboard and unit air conditioning. The land is owned in-common. • The Town of Manchester’s estimated market value for this unit as of 10/1/2006 was $67,000 • This unit sold on 3/29/2006 for $64,900. This unit sold on 1/25/2011 for $54,000. • The 1/25/2011 price represents an appreciation rate of -19.40% from the 10/1/2006 value. • General Fund taxes before revaluation: $1,321.64 • Projected General Fund tax range after revaluation: $1,120 to $1,190 (decrease 15% to 10%)

41. Sale Property Example #9: Commercial Property, $182,500 sale price

42. Location: Center Street area, Manchester, CT • 2,870 SF Office/Retail/Apartment building, with 2 office/retail units and 2 apartments. The building was built in 1910 and has gas, forced hot air heat and unit air conditioning. The building sits on a 0.28-acre (12,197+ SF) lot. • The Town of Manchester’s estimated market value for this property as of 10/1/2006 was $217,900 • This property sold on 11/15/2004 for $165,000. This property sold on 1/14/2010 for $182,500. • The 1/14/2010 price represents an appreciation rate of -16.25% from the 10/1/2006 value. • General Fund taxes before revaluation: $4,300.26 • Projected General Fund tax range after revaluation: $3,770 to $4,020 (decrease 12% to 7%)

43. Sale Property Example #10: Commercial Property, $650,000 sale price

44. Location: Spencer Street area, Manchester, CT • 9,728 SF Office multi-tenanted building. The building was built in 1987 and has gas, forced hot air heat with central air conditioning. The building sits on a 0.42 acres (18,295+ SF) lot. • The Town of Manchester’s estimated market value for this unit as of 10/1/2006 was $725,000 • This property sold on 9/18/2002 for $450,000. This property sold on 7/21/2010 for $650,000. • The 7/21/2010 price represents an appreciation rate of -10.34% from the 10/1/2006 value. • General Fund taxes before revaluation: $14,301.36 • Projected General Fund tax range after revaluation: $13,420 to $14,330 (decrease 6% to increase 0.2%)