Homes selling for less than assessed values

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January 7, 2009

Average sales prices for a house in Andover dips $26,000

By Judy Wakefield

The most recent real estate transactions for single family homes in Andover show selling prices going the same way as everyone's 401K statements — down, down, down.

Many homes at the end of 2008 were selling well below their assessed values, according to sales information compiled from the Registry of Deeds.

Here are some examples:

25 Yardley Road is assessed at $670,000; sold for $575,000 — $95,000 less than the assessed value.

18 Summer St., Unit 5, is assessed at $619,700; sold for $547,000 — $72,700 less than the assessed value.

48 Tewksbury St. is assessed at $378,200; sold for $345,000 — $33,200 less than the assessed value.

56 Prospect Road is assessed at $359,800; sold for $326,000 — $33,800 less than the assessed value.

Overall, the average selling price in Andover for a single family home is also dropping. The most recent information from the Northeast Realty Association in Chelmsford shows a $26,000 drop when comparing the third quarter of 2008 (the most recent data available) to the same quarter in 2007. The average selling price for a single-family home during the third quarter of 2008 was $540,000. During the same quarter in 2007, the average selling price was $566,000, according to the NRA.

Yet, Andover homeowners are facing a higher tax rate this new year. As of today, Jan. 1, Andover's tax rate is going from $11.69 to $12.16 per $1,000 of a residential home's value.

Assessor David Billard said homeowners need to remember that the state-regulated method of determining the assessed value of a home is based on selling prices from the previous year.

"It's not a current gauge," he emphasized. "It's a historic gauge."

In other words, Andover's new tax rate is based on the home sales of 2007, Billard said.

"They are exposed to the open market," Billard said of community tax rates.

So, does that mean Andover will have lower taxes in 2010 because declining selling prices in 2008 will make assessed values lower?

It's too early to say, Billard said. Home sales information for the entire year has to be compiled, and it will not be compiled for weeks.

"It's premature to predict what will happen," he said. "We look at sales and what homes are selling for, but the information is not out yet."

Local Realtor JB Doherty of Prudential, Howe and Doherty Realty in Andover, said the trend of selling homes well below assessed values is "getting more common."

"Selling prices are all over the place," he said, stressing that home buyers of today still stick to the golden rule of real estate selling.

"Location and the home's condition are still most important," Doherty said.

A home's location and/or condition could be reasons why homes are selling well below the assessed value.

"In some situations, a home may not be updated and have an outdated kitchen and bathrooms," he said. "The house next door with the same square footage could be in better shape and will sell for a price much closer to the assessed value."

A newer home at 1 Whispering Pines Drive is an example of a home that sold for more than its assessed value. The home sold for $901,000 and it's assessed at $846,000. So, it sold for $55,000 over the assessment.

Doherty is familiar with the home and said it is just 3 years old.

"That's what I mean about condition. That is a house in good shape, and the buyer wanted that," he said.

But, he said, it is more common these days for a home to sell below its assessed value.

No one can predict how the local real estate market will fare in this new year. But, keeping property updated is the best way to get the most bang for your buck.