2018 Housing Market Landscape: Majority believe good time to buy, sell

LANCE EVANS

The winter months in the north country are traditionally a slow time for real estate. It is a good time for people to reassess their housing situation.  For instance, is it time to downsize, time to get a bigger home, buy a second property, or stop renting? Potential buyers and sellers can also reflect on last year’s housing market data and examine the 2018 outlook so they can better prepare themselves for entering the market and buying or selling a home.

    Nationally, home sales and prices both increased in 2017.  In 2018, national existing-home sales are projected to be unchanged from 2017, at about 5.5 million sales, after rising the past three years, and the median home price will edge up only about 2 percent. One of the biggest challenges in 2018 will continue to be the low levels of homes available for sale.

    Regionally, the story was slightly different.  According to figures from the Jefferson-Lewis Board of Realtors and the St. Lawrence County Board of Realtors, all three counties (Jefferson, Lewis, and St. Lawrence) experienced stronger single-family home sales in 2017 than the previous three years.  In fact, unit sales were up 6 to 12 percent over 2016 and 25 to 3 percent over 2014. In addition, the number of homes for sale has declined year over year, which corresponds to the national picture.

    However, all three counties experienced a decline in median price, with St. Lawrence County having the smallest decline and Lewis County the largest.  The average price has also declined.  Some of this is due to an increase in homes sold through foreclosure. 

    The National Association of Realtor’s Housing Opportunities and Market Experience (HOME) survey tracks topical real estate trends and renters and homeowners’ views and aspirations regarding homeownership.  Released in December, the quarterly survey showed that at the end of 2017 a smaller share of homeowners believed that now is a good time to buy or sell a home, even with strong job creation and faster economic growth in the last months of 2017.  Optimism that now is a good time to buy has slipped from 62 percent in the third quarter of last year to 60 percent, up from 57 percent in December 2016.

    The report also found that 76 percent of homeowners think now is a good time to list their home for sale, which is down from last quarter (80 percent) but up from a year ago (67 percent). 

    This data should help potential buyers and sellers better understand the market environment and know what to expect in 2018.  Working with a real estate professional, they can apply the lessons learned from the past year and expectations for the year ahead to achieve their home buying and selling goals.


    In early February, fifteen Realtors from the Jefferson-Lewis and St. Lawrence County Boards of Realtors and I attended the New York State Association of Realtors (NYSAR) Mid-Winter Leadership Conference and Business Meetings at the Desmond Hotel in Albany.  We joined over 450 other attendees from around the state for meetings and informational sessions designed to enhance and advance real estate in New York and around the country.

    During the conference, Jennifer Stevenson (Blue Heron Realty, Ogdensburg) was sworn in as NYSAR’s 2018 secretary-treasurer.  This puts her in line to be NYSAR’s president in 2020.  As secretary-treasurer, Ms. Stevenson will oversee the finances of the State Association, chair NYSAR’s Investment Committee and Budget & Finance Committee, serve on the Executive Committee, and be part of the elected leadership team joining President CJ DelVecchio of Ithaca and Moses Seuram of Flushing.

                In addition, Lisa L’Huillier (Hefferon Real Estate, Watertown) was sworn in for a second term as governor for the state’s Women’s Council of Realtors (WCR) Network.  Ms. L’Huillier, a past president of both the local and state WCR networks, will work with the WCR networks in Buffalo, Rochester, Albany, as well as the local tri-county network.

LANCE M. EVANS is the executive officer of the Jefferson-Lewis Board of Realtors and the St. Lawrence County Board of Realtors. Contact him at levans@nnymls.com. His column appears monthly in NNY Business.

 

Thriving Successfully in A Real Estate World

AMANDA MORRISON / NNY BUSINESS
Lori Nettles, right, and Tania Sterling, left, own their own real estate firm, TLC Real Estate.

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Women’s Council of Realtors Honors Area Realtors

Lance Evans

January brought changes and new faces to the leadership of the St. Lawrence County Board of Realtors, the Jefferson-Lewis Board of Realtors, and the Tri-County Network of the Women’s Council of Realtors (WCR).

    On December 8, the St. Lawrence County Board of Realtors held its annual Holiday Lunch and Installation of Officers and Directors at Ogdensburg’s Gran-View on the River. During this event, the present officers, directors, and committee chairs were recognized and the 2018 Board of Directors was sworn in. The Association will be led by Richard J. Wood (RJ Wood Real Estate) as President. Joining him will be Vice President Brittany Matott (County Seat Realty), Secretary Doug Hawkins (Sandstone Realty), and Treasurer Amanda Kingsbury (Grey Arrow Real Estate). Rounding out the Board will be immediate Past President Debbie Gilson and returning Directors Joel Howie (JC Howie Appraisals) and Gail Abplanalp (Pat Collins Real Estate). Joining them will be new Director Tracy Barnard (Nikki Coates and Associates) and State Director Wendy Smith (Cross Keys Real Estate). There are two members leaving the Board of Directors, Cheryl Yelle (Yelle Realty) and Korleen Spilman (Century 21 Millennium Realty).  Both were thanked for their service.

    The lunch also featured a lively auction with many items donated by attendees. The $2400 raised was split between the Neighborhood Centers in Canton, Gouverneur, Massena, Ogdensburg, Potsdam, and Waddington.

    Several days later, on December 14, the Jefferson-Lewis Board of Realtors held its annual Holiday Party and Installation Dinner at Watertown’s Hilton Garden Inn. Similar to St. Lawrence County’s, a new slate of officers and directors were elected and installed. Leading the Association in 2018 will be Vickie Staie (Staie on the Seaway Real Estate Services and Appraisals USA) as President. Also on the Board of Directors will be President-Elect Alfred Netto (Weichert Realtors Thousand Islands Real Estate), Vice President Britt Abbey (Good Morning Realty and Abbey Appraisals), Recording Secretary Nancy Rome (Rome RSA Realty), Corresponding Secretary Lisa Lowe (Berkshire Hathaway HomeServices CNY Realty), and Treasurer Mary Adair (Bridgeview Real Estate). Returning directors will include Elizabeth Miller (Century 21 Gentry Realty), Cindy Moyer (Century 21 Millennium Realty), and Randy Raso (Raso Real Estate). Joining them as Directors will be Katharine Dickson (Front Porch Realty) and Desiree Roberts (Lake Ontario Real Estate). Walt Christensen (Howard Hanna Real Estate) will continue in his role as State Director.  Two departing members of the 2017 Board were thanked for their service, Tyler Lago (Homes Realty of Northern New York) and Gwyn Monnat (Howard Hanna Real Estate).

    The dinner also featured both a live and silent auction. The money raised was added to other moneys that were donated for a total of about $3300 which was donated to various area charities.

    During the Jefferson-Lewis event, Vicki Bulger (Howard Hanna Real Estate) was recognized as Realtor of the Year. This honor is bestowed on a Realtor who has been a member for at least five years, is in good standing and to reward the Realtor for effort, time and talent expanded in the interest of their fellow Realtors, their profession, and their community. Vicki was described in the nomination as being honest, having integrity, and as someone who pays attention to details. She was described as knowing the local market, being cheerful, steady, and a competent presence. Vicki has been recognized annually as a Top Producer by the Women’s Council of Realtors. She is a North Country native who has served on the Board of Realtors’ Board of Directors and supported various Association projects like the Community Service Committee, Salvation Army Bell Ringing, and other projects. She is married to John Bulger and has three children, including her daughter Sara who is also a Realtor.  Vicki joined the Association in August 1997.

    The Women’s Council of Realtors installed its Governing Board in October. The group will be led by President Alfred Netto, Vice President Jennifer Bossuot (Humes Realty and Appraisal), Secretary Wendy Smith, Treasurer Kylee Lawrence (Staie on the Seaway Real Estate Services), Membership Director Marsha Gibbons (TLC Real Estate), and Program Director Cheryl Schroy (Key Bank).

Third Quarter Sales: Tri-county home sales drop to lowest price point

BY: Marcus Wolf
Realtors sold more homes in Jefferson and St. Lawrence counties during the third quarter last year than any third quarter in the past four years, with prospective homebuyers securing stable employment cited as the reason.

    Third quarter median home prices for both counties, however, fell to their lowest during that time as homes, particularly foreclosures, were sold at lower prices.

    “We’ve seen economic recovery in Jefferson, Lewis and St. Lawrence counties,” said Lance M. Evans, executive officer of both the Jefferson-Lewis Board of Realtors and St. Lawrence Board of Realtors. “From the big downturn, unfortunately, we also had some foreclosures.”

    The number of houses sold in Jefferson County during the third quarter increased from the same time in 2016 by 34 units, or 10.3 percent, from 330 units to 364, according to the Jefferson-Lewis Board of Realtors.

    At the same time, the third quarter median home price in Jefferson County fell from the same quarter 2016 by $16,750, or about 11 percent, from $152,000 to $135,250.

    Vickie L. Staie, president of the Jefferson-Lewis Board of Realtors, said the U.S. Department of Defense has been stationing more soldiers and federal employees at Fort Drum and providing more long-term work to some current Fort Drum workers, which has led to more home purchases.

    Investors have also driven up homes sales during the third quarter by continuing to purchase foreclosed homes on the cheap and refurbishing them to later sell at a higher value, which has also lowered the median price.

     “I think it’ll have a great effect. We’re eliminating many zombie homes in our area,” Mrs. Staie said.

    Zombie properties are homes that owners abandoned after they stopped paying the mortgage and before banks began the foreclosure process.

    Homes sales during the third quarter in St. Lawrence County were up from the same time in 2016 by 23 units, or 11.3 percent, from 204 units to 227, according to St. Lawrence Board of Realtors.

    The third quarter median home price in the county fell from the same quarter in 2016 by $7,250, or 7.2 percent, from $101,250 to $94000.

    Richard J. Wood, president of the St. Lawrence Board of Realtors, said the Canton-Potsdam Hospital expansion continued to bring more homebuyers to the county. Several people also moved from a different home within the county to expand or downsize, which also drove up homes sales.

    “I think it has a lot to do with the length of time on the market,” Mr. Wood. “People want to wrap stuff up before it gets to the cold weather.”

    Prospective buyers also bought several foreclosed properties in the county, which Mr. Wood, who owns RJ Wood Real Estate LLC in Gouverneur, said brought down the median price.

“I’ve seen homes go right now that have sold for $10,000,” he said.

    Unlike Jefferson and St. Lawrence counties, home sales in Lewis County remained relatively flat in the third quarter compared to the same time in 2016.

    The number of houses sold in Lewis County decreased slightly from the same time in 2016 by two units, or about 3.3 percent, from 61 to 59.

    The median home price for the third quarter in Lewis County, however, decreased from the same quarter in 2016 by $20,000, or 17.4 percent, from $115,000 to $95,000.

    Mrs. Staie, who also owns Staie on the Seaway Real Estate Services LLC and Appraisals USA in Alexandria Bay, said several sellers’ asking prices were too much when compared to their market value, which keeps them on the market for a while. Many homes that sold during the third quarter were winter camps and cottages.

    “That brought (the median price) down a bit,” she said.

    Home sales from January to September last year increased from the same time in 2016 in all three counties. 

    The number of houses sold during the first three quarters increased in Jefferson County by 130 homes, or 18.3 percent, from 711 to 841; in Lewis County by 13 homes, or 8.9 percent, from 146 to 159, and in St. Lawrence County by 63 homes, or 12.7 percent, from 496 homes to 559.

    Foreclosure and waterfront home sales drove up the number of units sold last year in Jefferson County, Mrs. Staie said. The Kraft-Heinz plant expansion in Lowville led more people to buy homes in Lewis County, she said.

    “I think people are seeing the advantage of buying over renting,” Mr. Evans said. “It looks like we’re going to have a lot higher number for units sold than we had in previous years.”

    The median price for homes during the first three quarters of 2017 in Jefferson and Lewis counties, however, fell compared to the same time last year.

    The median home price for the first three quarters this year decreased in Jefferson County by $3,500, or 2.5 percent, from $138,500 to $135,000, and in Lewis County by $15,500, or 14.7 percent, from $90,000 to $105,500. Both price drops were driven by foreclosure sales, Mr. Evans said.

    “There are always foreclosures. There will always be foreclosures,” Mr.  Evans said.

    The median price in St. Lawrence County for the first three quarters of 2017, however, has remained relatively flat for the past four years.

    The price for the first three quarters of 2017 only increased by $1,000, or 1.3 percent, from $88,000 to $89,000.

    “We don’t have huge jumps,” in price, Mr. Wood said.

    Statewide, home sales in the third quarter decreased from the same quarter in 2016 by 1,248 units, or 3.1 percent, from 39,693 units to 38,445 units, according to the New York State Association of Realtors. The statewide third-quarter median home price, however, was up this year by $12,500, or five percent, from $249,000 in 2015 to $261,500.

 

The Difference Between Appraisals & Assessments

Lance Evans

BY: Lance Evans

In August, I wrote about assessments.  You may recall that assessments are opinions of value.  An assessor looks at all of the properties in a municipality and comes up with general values that are a component in computing the real property tax. While properties are treated similarly, assessments allow for differences like square footage, lot size, and general condition and upkeep. These variations can affect the assessment.

    How does this differ from how an appraiser works and how does an appraisal end up affecting the price paid for a property?

    Similar to an assessment, an appraisal is an opinion of value.  However, instead of looking at many properties within a jurisdiction, appraisers look at one property (subject property) and then find comparable sales (“comps”) that are like the subject property.  Ideally, comps are within a few miles and have sold within the past six months.  Like the assessor, an appraiser adjusts for differences in lot size, square footage, heating systems, etc. between the subject property and the comps to come up with a value. There is no set rule for what adjustments must be made. It is up to the appraiser’s judgement.  Adjustments are based on market reactions to amenities, features, or land size of a property.  Unique property types throw a whole other set of variables, so there is not a “cookie cutter” approach. 

    An appraisal usually varies from an assessment for several reasons. First of all, you may recall that the City of Watertown actually assesses at 92% of value. This means that a house that might be worth $100,000 would be assessed at $92,000. Other municipalities use different percentages.

    The other reason that there may be a difference is that appraisers are using data that is short term (6 months or less) and may cross municipal lines.  This means that an appraiser who has a subject property on the edge of a municipality might be using comps from a nearby town.  These would not figure into the assessor’s decision making process.

    In the North Country, the “6 month rule” does not always hold. Joel Howie, JC Howie Appraisals in Canton, noted that “One thing I consider in St. Lawrence County is a larger ‘market area’ or neighborhood when looking for comps. I may go outside an individual municipality to a competing neighborhood for comps. Because of the sparse population and diverse housing stock, I also may need to consider sales up to 18-24 months. Also, I may be appraising a modern colonial in Canton and I may need to consider a Potsdam sale in order to find sufficient sales data.”

    As I pointed out last month, an assessor works for a municipality.  Appraisers are generally self-employed and work for a variety of clients including lenders, private companies, and individuals.

    Much of an appraiser’s work is contracted by lenders.  The purpose of the appraisal might be for loan approval for a buyer or when a property owner refinances a mortgage.  The lender is required to use a variety of appraisers on a rotating basis and are not allowed to specify a certain appraiser.  However, the list can be limited based on an appraiser’s certification and approvals.  For instance, an appraiser needs to apply to be Veteran’s Administration (VA) certified.

    So what education is needed for appraisers? Like assessors, appraisers have taken special training to get licensed or certified. In addition to course work, they must work with a licensed or certified appraiser for a period of time.  After being licensed, appraisers take twenty-eight hours of Continuing Education every two years. A portion of this education is in Uniform Standards of Professional Appraisal Practice (USPAP).

    Property owners can also hire an appraiser.  The owner may want to find out what his or her property is worth prior to selling the property, it may be needed to help settle an estate, or the owner may want to check the worth against an assessment.

    Appraisals are usually effective as of the date of inspection.  Assessments are based on an earlier date usually as of the date the roll was submitted, which depending on that date could be nearly 2 years prior to the current date. In an increasing or decreasing market, assessment and a current appraisal may be quite different.

    So what is the difference between the assessor’s job and that of an appraiser?  Simply put, the assessor looks at the “forest” of properties and the appraiser looks at individual “trees.”

    In my August article, Last month I made an error in my article on assessment. I stated that if the assessment is $10 per thousand dollars then a property assessed at $92,000, the bill would be $92.  It would be $920.

What is “Assessed Value?”

Lance Evans

By: Lance Evans

The word “assessment” is defined as “the evaluation or estimation of the nature, quality, or ability of someone or something.”  In real estate, the terms “assessment” and “assessed value” are used frequently and are interchangeable.  

                Frequently people ask why a property is on the market for more than the assessment and if, after the property sells, the assessment will be adjusted to reflect the purchase price.

                I  spoke recently with Brian Phelps, the city of Watertown’s assessor for the past eleven years. We talked about his experience, what an assessor is, and what his or her job is. 

                Assessors are certified by the New York State Department of Taxation and Finance. They need to take a basic certification class and then need to take continuing education periodically.

                Mr. Phelps, who has 20 years of experience as an assessor, began his career as one of three elected assessors in the town of Champion. At one point, prior to being hired by the city, he was employed by three different towns in three different counties. This allowed him to see different systems and ways of doing his job along with a wide variety of properties and economic factors.

                Assessments are, at their core, opinions of value. They differ from an appraisal, which looks at an individual property. The assessor looks at the properties as a whole. His/her estimate of the value of real property is converted into an assessment and is one component in the computation of real property tax bills.

                While properties are treated similarly, assessments allow for differences like square footage, lot size, and features like a pool, porch, deck, etc. They also take into account the general condition and upkeep a property has. Variations like a big upgrade or a decline in maintenance can affect the assessment. An assessor  has access to building permits and he evaluates these based on how they impact the quality and condition of the property.

                His job is to “hit the value” with his assessment. Since he has access to property sales, I asked him what happens when a property sells. Does that automatically mean a change in the assessment? His answer was no.

                Before going further, it is important to note that the city of Watertown assessments reflect 92 percent of a property’s value. This means that if a property is assessed at $92,000 and sells for $100,000, the assessment was right on target. 

                When there is a large variance (higher or lower) in the price versus the assessed value, it could trigger a review of the assessment. Mr. Phelps pointed out that what usually has happened is that what was sold is not what was valued in the assessment. There are times when a buyer pays more than a property would normally be valued.

                For instance, in a “hot” market where properties are selling very fast and have multiple offers, the price paid can easily be much higher than the assessment. Similarly, if an area has suddenly experienced a quick drop in market value, properties can sell well below assessment.

                Either way, the assessor looks at the reasons surrounding the difference between the assessed value and the actual sale price and may adjust it accordingly. Mr. Phelps looks at the property as it was valued and what actually sold.

                Outside of a city-wide revaluation, the main way an assessment changes is a physical change to the property like an addition, something that markedly improves the value, or something that causes a dramatic drop in value. 

                Earlier, I noted that the assessment is only one component of how the real property tax bill is calculated. The other portion is the tax levy that the municipality, county Legislature, and local school district set as the amount that needs to be collected. The levy is the amount of money needed to fund government operations after accounting for state aid, sales tax and other income sources.

                According to Mr. Phelps, the total value of property in Watertown is roughly one billion dollars. If the City Council determines that the amount needed from property tax is ten million dollars, then the City’s portion of the property tax will be $10 per thousand dollars of assessed valuation. In the earlier example of a property assessed at $92,000, then the bill would be $92.

                Next month, I will be looking at how appraisals work and how they differ from assessments and how they can help determine the market price for a property.

Realtors Meet with State Legislators

 

Lance Evans

Last month I wrote about our meetings with our United States senators and congresswoman in mid-May. Several days after returning, a number of area Realtors and other interested parties went to Albany to meet with our state representatives on May 23 about several state-specific issues of interest to area homeowners. This was part of the New York State Association of Realtors’ annual Lobby Day. Over 250 Realtors from around the state participated.

    The Tri-County area was represented by Linda and Pat Fields (Linda J. Fields Broker and Professional Institute for Real Estate Training), Lisa L’Huillier (Hefferon Real Estate), Karen Peebles (Berkshire Hathaway HomeServices CNY Realty), Chuck Ruggiero (Hefferon Real Estate), Cheryl Schroy (Key Bank), Vickie Staie (Staie on the Seaway Real Estate Services and Appraisals USA), and Jennifer Stevenson (Blue Heron Realty) along with me. During the day, we met with Senators Joe Griffo (47th District), Betty Little (45th District) and Patty Ritchie (48th District). In addition, we had meetings with members of the Assembly Will Barclay (120th District), Ken Blankenbush (117th District), Marc Butler (118th District) and Addie Jenne (116th District). We informed them about the current housing market and our stances on several issues.

    We began by talking about the NY First Home Program. This is a first-time home buyer savings account program introduced by Senator Little and Assemblyman Phil Ramos (6th District). If passed into law, it would create a new tax-free savings account modeled after the State’s 529 College Savings Program. NY First Home would help New Yorkers achieve the dream of homeownership by creating a dedicated savings account to be used exclusively to cover costs associated with the purchase of a first home in New York state, whether that is a single family residence, condo, cooperative apartment or townhome.

    Using this program, New Yorkers could cover costs associated with the purchase of a first home using this dedicated savings account to deposit up to $5,000 ($10,000 for couples) of after-tax dollars annually, receive a state income tax deduction on the principal investment and grow savings tax-free, and then apply the savings and interest towards the purchase of a first home in New York state.

    The largest inhibitors for hopeful first-time home buyers in New York state are the initial up-front closing costs and high down-payment requirements. Enactment of NY First Home would provide New Yorkers with a practical savings mechanism to make buying a first home more affordable in New York state. This incentive would also have a positive effect on retaining young people in the state and provide a boost to local and state economies.

    A Sienna Research Institute poll in December 2016 found that 84 percent of New Yorkers supported NY First Home and 80 percent agreed that the governor and Legislature should make assisting New Yorkers in saving for a first home a priority.

    This bill passed the Senate during the 2016 session and is working its way through both houses in 2017.

    Our second issue concerned reinstating the STAR Exemption Program and sunset the School Tax Relief credit program that was written into law last year. Although both called “STAR,” the two programs work differently. The previous version provided immediate or “upfront” reductions in school taxes for homeowners.

    The change in 2016 to the STAR credit program led to confusion with new home buyers unsure of whether or not they would see the upfront savings as an exemption or be mailed a check under the credit program. In the worst instances, many homeowners received STAR credit checks later than when their school taxes were due, making it difficult to pay the full school tax bill. It is also still unclear from the Department of Tax and Finance whether or not future STAR credit checks will be taxed as income. This legislation would return the STAR program to a predictable upfront tax benefit to New York’s homeowners.

    The legislation has passed the Assembly and is working its way through the Senate.

    Realtors will continue to watch these issues and advocate for current and future New York property owners with our federal, state, and local officials.

LANCE M. EVANS is the executive officer of the Jefferson-Lewis Board of Realtors and the St. Lawrence County Board of Realtors. Contact him at levans@nnymls.com. His column appears monthly in NNY Business.

Realtors Advocate For Property Owners and Buyers

Lance Evans

The month of May saw Realtors from our area join their counterparts across the state and nation to advocate for consumer friendly real estate issues and oppose measures that would hurt property owners and buyers.

    During the week of May 15 to May 20, the National Association of Realtors (NAR) held its annual Legislative Meetings & Trade Expo in Washington, D.C. Attended by approximately 8,500 attendees from across the country and around the world, the week included about 200 meetings and events that covered many real estate topics and allowed Realtors to take an active role in advancing the real estate industry, public policy, and the Association. 

    The tri-county area attendees included Jennifer Dindl (Humes Realty and Appraisal), Carolyn Gaebel (Bridgeview Real Estate and Gaebel Real Estate Services), Lisa L’Huillier (Hefferon Real Estate), Brittany Matott (County Seat Realty), Al Netto (Weichert Realtors, Thousand Islands Realty), and Jennifer Stevenson (Blue Heron Realty), along with myself. During the week there were NAR and Women’s Council of Realtors committee meetings, idea exchanges with other Realtors and staff, and information and updates that will assist all of us in better serving the area’s real estate consumers.

    On May 18, we met with Congresswoman Elise Stefanik and joined colleagues from around the state while meeting with Senator Kirsten Gillibrand and Senator Charles Schumer. We focused on three main issues.

    The National Flood Insurance Program (NFIP), of particular interest to our area, is slated to expire on September 30. Without reauthorization, NFIP cannot issue or renew policies in 22,000 communities where flood insurance is required for a mortgage. The NFIP was created to provide incentives for communities to rebuild to higher standards and steer development away from flood zones. In exchange, communities gain access to flood maps, mitigation assistance and subsidized insurance to prepay for future damage and recover more quickly from flooding. The NFIP was last up for reauthorization in 2008. There were 18 short-term extensions and a two-month shutdown before Congress reauthorized the program in 2012.

    We asked our representatives to pass the “Flood Insurance Market Parity and Modernization Act,” which passed the House unanimously last year, and to enable consumers to meet federal requirements with private plans that often offer better coverage at a lower cost than the NFIP.

    Tax reform was also on our list of issues. While no tax reform legislation had been introduced as of our meetings, there were several plans that had been discussed. Some of these would lower tax rates and raise the standard deduction, but would pay for these changes by scaling back existing real estate tax provisions. Proposals that limit itemized deductions, even if not directly changing rules applicable to mortgage interest, could have serious negative consequences for homeowners. 

    PricewaterhouseCoopers (PwC) analyzed a blueprint-like tax reform plan and noted that home-owning families with incomes between $50,000 and $200,000 would face average tax hikes of $815 in the first year after enactment, while non-homeowners in the same income range would see an average cut of $516. Currently, homeowners pay 83 percent of all federal income taxes, and this share would go even higher under similar reform proposals. Homeowners should not have to pay a higher share of taxes because of tax reform.

    Further, proposals limiting tax incentives for homeownership would cause home values everywhere to plunge. Estimates provided by PwC show that values could fall in the short run by more than 10 percent, with a larger drop in high-cost areas. It might take years for home values to rebound from such a significant decrease.

    The final issue we spoke about was protecting sustainable homeownership.   We asked our representatives to responsibly reform the secondary mortgage market. Failure to do so, while limiting costs imposed on homeowners, ensure proper loan disclosures, and fund necessary system upgrades for federal housing programs hurts the very fabric and underpinnings of our society.

    Fannie Mae and Freddie Mac act as a backstop for mortgages and help to safeguard 30-year, fixed rate mortgages ensuring families are not shut out of homeownership. We asked that these entities not be dismantled without identifying a viable replacement.

    The week was productive and informative. It is important that our representatives hear from Realtors advocating for property owners. The information we received at the meetings will assist us as we work for housing opportunities in the area.

LANCE M. EVANS is the executive officer of the Jefferson-Lewis Board of Realtors and the St. Lawrence County Board of Realtors. Contact him at levans@nnymls.com. His column appears monthly in NNY Business.

To Buy or Rent, That is the Question!

Lance Evans

A recent Watertown Daily Times article cited a study by SmartAsset comparing average rent to home prices by county nationwide.
    In New York state, Jefferson County ranked 8th in terms of being more viable to buy than rent. According to the study, the break-even point, the point when the amount paid in rent exceeds the cost of purchasing a home, is 1.4 years. For the comparison, SmartAsset used an average price of $222,146 for a Jefferson County home with an average monthly mortgage of $558 versus an average monthly rent of $1,492.

    A little lower on the list was Lewis County at 22nd with a break-even point of two years. The average home price used was $178,887 with a monthly mortgage payment of $464 and $1,066 monthly rent.

    Coming in at 33rd in the state was St. Lawrence County. Using an average home price of $138,283, a monthly mortgage payment of $346 and monthly rent of $1,105, SmartAsset estimated that the break-even point was a little over two years.

    For the analysis, SmartAsset assumed a mortgage rate of 4.5 percent, closing costs of $2,000, and a 20 percent down payment when it created the above comparisons. A higher rate, a lower down payment, etc. would change these calculations.

    A similar study, done by ATTOM Data solutions came out in January 2017 and noted that in about two-thirds of the nation’s counties, it is more affordable to buy a home than rent. ATTOM compared rents of fair market three-bedroom properties to the monthly payments on median priced homes in 540 counties. The calculations included the cost of mortgages, property taxes, and insurance. The report also noted that in about a quarter of the markets surveyed, rents are surging faster than home prices.  In fact it noted that, on average, rents for a three-bedroom property rose 4.2 percent nationwide.   

    While ATTOM did not look at St. Lawrence or Lewis counties, Jefferson County was included.   Like SmartAsset, ATTOM found that it was more affordable to buy than rent in the county. They estimate that a buyer will spend about 26.8 percent of the average wage when buying a median priced home ($129,000) in Jefferson County while it takes 44.8 percent of wages to rent a three-bedroom dwelling at a median rent of $1,492. ATTOM’s study showed that in other areas of the state, for instance many of the Hudson River Valley markets, it is less expensive to rent.

    The analysis incorporated recently released fair market rent data for 2017 from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics, and public record sales deed data from RealtyTrac in counties with at least 900 home sales in 2016.

    A third analysis by realtor.com showed that in all three counties, it is less expensive to buy than rent. In fact, Jefferson and St. Lawrence counties are numbers three and four in the state with Jefferson County buyers using twenty-two percent of income while renters used thirty percent. St. Lawrence County had a narrower gap of 6 percent with a buyer needing to spend 16 percent of income to buy and 20 percent to rent. Lewis County was also less expensive to buy with a 2 percent gap.

    Clearly, it is currently less expensive to buy than to rent in our area. So what should you do? Look at your circumstances including income and debt, consider the alternatives, and if you think you might be interested in buying a property, check with a mortgage professional and an area Realtor.

    Jennifer Stevenson, licensed real estate broker and owner of Blue Heron Realty in Ogdensburg, has been nominated as 2018 secretary-treasurer of the New York State Association of Realtors (NYSAR) a not-for-profit trade organization representing more than 53,000 of New York State’s real estate professionals.

    Ms. Stevenson, a member of the St. Lawrence County Board of Realtors since 1989, has served in many capacities at the local, state, and national levels of the Realtor Association. She is a past president of the St. Lawrence County Board of Realtors and served on the Association’s board of directors for over 25 years. In addition, she has chaired several NYSAR committees, and participates in the National Association of Realtors meetings. Locally she serves on the Ogdensburg City Council, is active in Rotary, and participates on St. Lawrence County’s Fair Housing Task Force among other activities. The elections will take place on September 27 at the NYSAR Board of Directors meeting.

Quarter One Homes Sales Higher than Last

AMANDA MORRISON / NNY BUSINESS

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