Revaluation likely this year

While housing prices remain high, some see market stabilizing

Posted 3/23/23

While arguable whether the real estate market has stabilized - the reason for delaying revaluation last year - the administration is leaning toward implementing the revaluation this year.

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Revaluation likely this year

While housing prices remain high, some see market stabilizing


While arguable whether the real estate market has stabilized - the reason for delaying revaluation last year - the administration is leaning toward implementing the revaluation this year.

Citing what he sees as a more stable housing market, Mayor Frank Picozzi said last week he’s leaning toward moving ahead with the revaluation rather than seeking City Council and state legislative approval to postpone it again. Under state statute, municipalities are required to revalue properties every three years. The city was prepared to implement a revaluation based on values as of Dec. 31, 2021 last year, but was granted legislative approval to postpone enactment. If the city moves ahead with a revaluation this year, it would be based on values as of Dec. 31, 2022.

“We’re ready to go (with a revaluation) or ready to stay the same,” City Tax Assessor Neal Dupuis said Thursday.

“We have enough time to do both,” he added.

The administration has started the budget process with the mayor meeting department directors to review their requests for the fiscal year starting July 1.  By city ordinance, the mayor presents the budget including a proposed tax levy by mid May. Tax rates for residential, commercial and personal tangible property are derived on the revenue needed to balance the budget as equitably shared by the taxpayers based on their property value.

Property values projected to climb

With the red hot housing market driving up single family and condo sales in the past two years, residential property owners can anticipate their home valuations to eclipse what they were as of the last revaluation four years ago.

Realtor Dean deTonnancourt of Home Smart has seen it happen. He cautions homeowners not to equate the percentage of appreciation in their home value to what will happen to their taxes.

“Don’t apply a 40 percent increase in home valuation to the tax bill,” he said.

Tax rates are derived by a calculation of how much revenue is needed to balance the budget.  Traditionally, tax rates drop following a revaluation tax rates.

Stable is not the word deTonnancourtuses to describe the single-family housing market. Despite a dramatic increase in mortgage rates resulting from federal efforts to choke inflation, the demand for housing hasn’t cooled even though there are not the bidding wars, cash deals and waiving of inspections that highlighted the frantic scramble to buy houses over the past two years.

With 613 single family houses on the market statewide as of Thursday, deTonnancour said a shortage of inventory continues to drive up prices. He said the number of houses for sale represents a one month inventory. The industry considers a 6-month inventory as a healthy balance.

According to the Rhode Island Association of Realtors report released Monday  the February single-family home median sales price of $384,000 was 4.4% higher than that a year earlier The data, which represents all Realtor-assisted sales transacted through State-Wide Multiple Listing Service, a subsidiary of the Association, also showed a 29.4% drop in sales year-over-year, and a 21.2% decrease in contracts in progress but not closed as of the end of February.

In a release association president Bryant Da Cruz is quoted, “Our median sales price continues to grow in large part due to having more move-up homes than starter homes on the market. Prospective buyers trying to break into the market for the first time are facing an uphill battle with few choices and interest rates higher than we’ve seen in several years.”

Warwick home prices drop

Data provided in the report show that 29 fewer Warwick single family homes sold this February, a decline of 41.4 percent than a year ago February. The median price of Warwick homes sold also dropped from $325,000 to $317,500, a drop of 2.3 percent.

As a basis of comparison, the national median existing home sale price in February fell 0.2 percent from February 2022 to $363,000 according to a story in the March 22 Wall Street Journal.

Should the administration move ahead with a revaluation this year, Dupuis said valuation notices would likely go out in late May or early June. Hearings for those disputing their property value would follow. Traditionally, this has been a lengthy process requiring scheduled meetings between taxpayers and appraisers. Dupuis said since Covid this process has been streamlined.

“It’s all about data, not the face-to-face,” he said. One-on-one meetings will remain an option but property owners will be encouraged to submit their arguments and supporting data such as photographs.

Dupuis said the wording of the published budget notice in a revaluation year allows for the budget and tax rate notice prior to the mailing of value notifications to property owners. Should the revaluation be implemented this year it would be a statistical revaluation based on sales and comparables as close to the end of last year as possible.

Full revaluation next year

Also, factoring into the decision of whether to implement the revaluation this year is what needs to happen next year when by statute the city is required to conduct a full revaluation that requires physically visiting properties.

He explained that traditionally the city seeks bids on the basis that appraisers visit 100 percent of the properties, where in reality they get to tour 35 to 40 percent of the homes since homeowners refuse to let them in or are not home when visited. He is considering an “opt-in” process giving property owners of having a visitor. This would give the property owner to show an appraiser aspects of the property they feel should be considered in establishing the value. In addition, it would serve to reduce the cost of the revaluation.

Providing a tool for appraisers to survey a property without visiting it, Dupuis is updating its GIS system to verify them on a city map. He is looking to add EagleView technology that provides oblique angles of a property. EagleView is leased on a per-user basis. Dupuis projected the yearly cost at $2,200 a year for 50 users.

When asked about conducting the revaluation earlier this year, Dupuis said he was looking into adjustments of tax classifications. Currently the city taxes property by three classifications: residential, commercial and tangible and personal property. Presently there is and exemption for “goods of home” meaning property such as home appliances, computers and furnishing are not taxed. That is not the case for commercial properties.

Might that tax be applied to properties, maybe Airbnbs that are a business?

“I don’t think that would happen,” Dupuis replied.

He is also cautious about application of the tangible tax on small home businesses as that could be a factor in whether they survive.

Dupuis measures the fairness of the system on the basis of tax abatements resulting from valuation challenges that are sometimes settled in court. In 2018 when Dupuis was named assessor, the city abated $3.7 million in taxes. The total in 2022 was $300,000, Dupuis said.

As for the task the revaluation encompasses 41,000 properties of which 38,000 are taxable. From 11 to 12 percent of the taxable properties are commercial.

In total, all the properties carried a value of $12 billion in the last revaluation of which $9 billion was taxable. Making up a large portion of non taxable property is the airport, CCRI, Kent Hospital and churches and non profit organizations.

What should homeowners do should the administration move ahead with the revaluation this year?

“Step back,” Dupuis said, “and ask can I sell the house for that, not what I have to pay in taxes.”


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  • bill123

    Here and nationally, a revaluation is supposed to be a “sales ratio study”, which is a statistical analysis, the input for which are properties which have been sold and their sale prices over the prior time period. The output is a report. The reason for the sale (hotness or coldness of the market, etc ) is not a factor. It just looks at sold properties and their characteristics. This is then extrapolated onto all other properties, if statistical limits are satisfied. This is my understanding. In prior years this study was conducted by a single company for several (all?) RI towns. Do not rely on me or the Beacon. The process needs to be fully explained by the city, and the reports publicly posted.

    Thursday, March 23, 2023 Report this