Manchester residents experiencing sticker shock after the first citywide revaluation in five years should know this:
Assessor Bob Gagne says the 40% jump in property values across the Queen City could have been worse.
“Those numbers that you got in the mail are already outdated and too low, based on the sales that have occurred since April,” Gagne said. ”I don’t think I saw one sale (since April) where the sale price was less than the new assessment and a lot of them were significantly more... 10% to 15% more.”
Aldermen quizzed Gagne on the revaluation process Tuesday at City Hall, after several residents expressed alarm at the new assessments.
The sizzling home sales market pivoted values from commercial properties to the residential side. Single-family houses are up 46%, with a median assessed value of $304,300. Commercial property rose just 14%, with industrial sites up 21%.
Ward 9 Alderman Barbara Shaw said she was “shocked” when she received her assessment, showing a 67% increase in value.
“I didn’t do any improvements in my house,” Shaw said. “I didn’t do anything to it.”
The new assessments were determined by reviewing all permits and sales between April 1, 2020 and April 1, 2021 and looking at updated construction costs, land values and income and capitalization rates for commercial properties, Gagne said.
The rates and values were then tested against comparable sales between April 1, 2020 and June 30, 2021 “to ensure they are at market value,” Gagne said.
Shaw said she has heard from constituents in wards 8 and 9 who saw their home values shoot up 50% to 60%, well above the 46% increase for single-family homes reported by Gagne.
“It seems like the South End really got socked,” Shaw said. “I’m really upset about it. It’s really distressing because a lot of us have owned our homes for many years and are on fixed incomes, and there are young families with no intentions of selling their homes.”
Gagne stressed the rates come from home sale data, citing recent sales involving Laurel Ridge condominiums on Calef Road in Ward 9 as an example.
“Before the reval, those were assessed in the high 40s (thousands) for the small units to the mid-50s,” said Gagne. “Those have been selling for 115, 125 and up. So how much of a change in value is that? The market did that, not the revaluation. All we’re doing is looking at the sales, looking at the information and applying that to the assessments.”
Shaw said anyone whose assessed value spiked 50% or more should receive an automatic review.
Manchester is required by state law to reassess all local real estate at least every five years. The last revaluation was performed five years ago.
Gagne said when the 40% increase in the tax base is applied to the current tax rate of $24.66, the resulting tax rate will drop. He said he expects it to fall to somewhere between $17.50 and $18, with the rate finalized near the end of November.
Tax rates are set by the state Department of Revenue Administration.
Several residents, including mayoral candidates Victoria Sullivan and Richard Girard, asked Gagne and city officials to submit the numbers to the DRA no later than the second week of October so it can set the rate before the November city election.
In addition to information from Gagne’s office, DRA also requires the tax collector, school district and finance director to submit paperwork before setting the tax rate.
“I have a list of dates we sent them in for the last 10 years — last year was Nov. 12, the year before Nov. 8, the two years before that Nov. 2,” Gagne said. He said the school department is usually the last to send its data, “becuase they are waiting for additional information.”
“Nov. 1 is a reasonable deadline,” he said. “If we had to complete it early we could, but I don’t believe it would be as healthy a process to complete it earlier.”
Alderman Pat Long asked Gagne about cash sales of properties.
“I am astounded by how many of these are all cash, no mortgages,” Gagne said. “A six-family selling for $700,000 and it’s all cash...there’s no bank financing at all. There have been a good number of single-family homes selling for all cash. The list price is $360,000, selling for $420,000 and when it closes, it’s an all cash sale.”
Residents who want to contest their home’s assessed value must schedule a hearing before Sept. 16. Information is available online at vgsi.com, the website of Vision Government Solutions.
Residents can look up their property’s tax value at gis.vgsi.com/manchesternh.
Gagne said he plans to submit a recommendation to the aldermen next month to update the elderly exemption, disabled exemption and blind exemption “so that they keep pace with these increases, and those individuals receiving those exemptions don’t have a dilution in their exemption amounts.”