LACONIA — The city council learned Monday that a review of property tax abatement requests has revealed some trends that need to be addressed.
Key among them are inconsistencies in location factors for condominiums, waterfront land values, water access properties and neighborhood values, according to Stephan Hamilton, the city’s new contractor assessor.
“The desired outcome is more uniform changes in values in particular locations,” said Hamilton, who headed the Municipal and Property Division of the New Hampshire Department of Revenue Administration for more than ten years before launching Whitney Consulting Group.
Shortly before Thanksgiving 2018, the former city assessor gave notice and resigned. As a result of the vacancy the city explored whether to hire another employee or whether to contract for the services, like many other municipalities.
The contract was put out for competitive bid and WCG was awarded the contract that began April 1 and runs through the end of calendar year 2021 at a cost of $285,200. There are two separate one-year renewal options, should the city choose to exercise them.
Under the terms of the contract, either Hamilton or Emily Goldstein, who formerly served as deputy assessor in the City of Portsmouth, will be available two to three days each week to meet with taxpayers by appointment. The assessing office will continue to be staffed by an assistant assessor and two assessing technicians who handle the day-to-day operations of the department.
The inconsistencies were identified by Hamilton while he was processing abatement requests. Eighty-nine property owners filed abatement requests last year, an increase of 30 from 2017.
The valuation process will begin in August. While typically they would be completed by Sept. 1, this year they will be delayed by about 30 days, due to the late start of the contract. WCG will share the preliminary results with the council in mid-September. Tax rates cannot be set by the Department of Revenue Administration until Oct. 1.
Since 2015, Hamilton said, the number of arm’s-length sales of city property has been increasing from year to year, from a low of 289 to 539 to date. Homes in the $100,000 to $200,000 range represent the lion’s share of those sales from 2014 to 2019. Sales volume of properties costing over $500,000 are a bit more erratic as the total number is smaller and hence more prone to statistical fluctuations.
Another positive trend Hamilton identified is that the median sales price of Laconia homes is also steadily trending upward from $150,000 in 2014/2015 to $179,933 in 2018/2019. Meanwhile, the number of foreclosures has plunged correspondingly as values have risen, giving financially strapped owners the ability to borrow against the increase in equity. In 2013, 85 properties went to foreclosure in the city. Last year there were only three.
Mayor Ed Engler said he has heard people recount that waterfront property in Laconia is “way under-assessed,” and that sales have been documented at prices that are double what the city has on the books. He questioned whether soaring values were outpacing the ability to keep assessments current.
Hamilton explained that the mathematical model used seeks to predict a market value and works well 90% of the time. Such a model can’t account for emotion however, and people buy what they like, especially at the higher end of the market, he said.
Councilor David Bownes questioned what role a property listed at $325,000 that sells for $425,000 plays in the assessing process.
Hamilton said the process tries to extract the market influence from that sale and apply it to all properties in the same way.
Councilor Henry Lipman said that in past years, the Department of Revenue Administration’s annual review of a sampling of the city’s assessing data has been positive and asked whether that trend is expected to continue. Citing the large volume of sale data available, Hamilton said, he thinks those statistical measurements will remain positive.