SEABROOK — With the hottest real estate market anyone can recall, the jump in sale prices over the past 12 months is having an impact as communities undertake the property revaluations required at least every five years by state law.
This is a revaluation year in Seabrook, and the results are startling. The assessed value of all local property increased by 23%, although most residential property owners received notices recently that their property values increased at least 28%, according to Vision Government Solution, the company hired by the town to conduct the revaluation. Only condominium prices went up a little less at 26%.
Values of Seabrook Village District homes and oceanfront homes went up 31% and 30% respectively, with three-family homes seeing the largest increase at 32%.
“The state requires communities to do a revaluation every five years,” said Seabrook Assessor Angela Silva. “And those assessed values have to be 100% of market value. I’ve tried to keep up with the market over the past years, but it was hard to keep up with the market. (Before the revaluation) our ratio of assessed value to market value was at only 89%.”
The phenomenon driving the amazing rise in valuations is the blazing real estate market in the past year, Silva said. And since revaluations assessments are set based on the most recent selling prices of real estate – in this case from April 1, 2020, to April 2021 – the impact was significant.
“Vision said the market went up 15% in the last year alone,” Silva said. “It’s the most rapid move in the market I’d ever seen. We saw a lot of properties sell above the asking prices.”
According to Silva, after the real estate bubble in the early part of this century popped around 2007 and 2008, prices of homes plummeted. The market stabilized in 2011 and began to rise. In the past few years, prices have risen, she said, but nothing’s been like the past 12 months.
Red hot real estate market drives up home values
Dave Cummings, director of the New Hampshire Association of Realtors, had similar comments earlier this year. He said a historically low inventory of homes available for purchase throughout New Hampshire, and in Rockingham County, in particular, drove prices up. When the law of supply and demand kicked in, those seeking homes often engaged in bidding wars to get the homes they wanted.
“It’s a simple supply and demand equation,” Cummings said in March. “Most of our members haven’t seen a market like this in their careers.”
There was an insufficient supply of homes for sale in the state’s inventory even before the COVID-19 struck, Cummings said, but the pandemic exacerbated the problem.
Another factor driving prices up is more people seeking to buy homes because of historically low-interest rates, Silva said.
“With low-interest rates you can afford to buy more house,” she said.
To examine the impact the recent market has on property prices, one has only to look at Seabrook’s past revaluation years.
In its revaluation of 2011, when the country was just creeping out of the Great Recession begun in 2007, Seabrook’s saw the values of most real estate drop from 1 to 2%, with mobile home prices descending 5%. Only condominiums and waterfront properties increasing in value by 7%.
The next revaluation in 2016 took place when the nation had recovered completely from the recession. The result was the value of an average single-family home rising from $252,000 last year to $282,000 that year, or an increase of about 12%, although those living at Seabrook Beach saw a higher percentage hike. On average, Village District home values rose by 15% in 2016, with some oceanfront property values rising from 20 to 25%.
What is the impact on property tax bills?
Town Manager Bill Manzi advises property owners not to panic as a result of their new assessed property value. Manzi said, many people believe rising assessed values automatically equates to a higher tax bill, but that’s a misconception.
It’s a community’s expenses, or the amount that has to be raised in taxes to cover the town’s expenses, that determines the amount people pay in property taxes, he said.
For example, he said, if town expenses remain the same and values of properties go up, tax bills can go down.
Seabrook’s town operating budget has increased over the years, he said, but only marginally, as selectmen try to hold spending down to a minimum.
However, he cautioned, voters approved more than $4 million dollars in special warrant articles at the polls in March. Payment for most of the money articles passed wasn’t spread out through bonding or leases, he said, or paid for using money from the town reserves.
“Most of the articles that were passed this year are what we consider ‘one-offs,’” he said. “They have to be paid off in one year. What voters did will affect the tax rate.”
Manzi expects the town will be able to set the new tax rate by late October or November. The financial impact of that, and the new assessed property valuations, will be arriving in mailboxes when the next tax bill goes out, around the end of November.
Seabrook property value increases by type and style of property
Residential:
Single-family home, 29%
Mobile homes, 29%
Residential condos, 26%
Two-family homes, 29%
Three-family homes, 32%
Beach Properties, generals, 31%
Ocean Front Properties, 30%
Vacant land, 28%
Commercial:
Apartment buildings, 24%
Mixed use buildings, (commercial/residential) 16%
Commercial/industrial, 5%
Residential property by style:
Ranches, 31%
Raised ranches, 25%
Split levels, 27%
Colonial homes, 26%
Capes, 25%
Bungalows, 26%
Conventional, 28%
Modern contemporary, 36%
Mobile homes, 27%
