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.