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Property values show town remains in economic microcosm

Date: 12/22/2008

By Katelyn Gendron

Reminder Assistant Editor

AGAWAM Despite national trends of skyrocketing foreclosures and slumping property values, Agawam has continued to remain within its own insolated economic microcosm.

Town Assessor Kevin Baldini told Reminder Publications that the latest real estate evaluation -- which adjusts property values to reflect market conditions as of Jan. 1 -- has created a 1.6 percent increase in the assessed value of single-family homes and a 1.9 percent decrease for commercial properties. He noted that the assessed value for single-family homes went from $229,150 in fiscal year 2008 (FY08) to $232,900 in FY09, while commercial values averaged $694,200 in FY08 and $681,500 in FY09.

"Agawam and places like Agawam are not necessarily like San Francisco, Calif., or Phoenix Ariz., where everything was overvalued," Baldini said.

"Despite shifting the rate on the commercial and industrial property classes to the maximum 175 percent at the tax classification hearing on Dec. 1, the tax burden for FY09 is still increasing by about $120 annually on the average single-family homeowner, while going down slightly for the average commercial or industrial property owner," he explained. "At that shift the residential rate went from $11.74 in 2008 to $12.07 in 2009, and the commercial rate went from $25.64 to $26.04."

Baldini noted that over the past fiscal year, the town's residential class of property increased in value by $48.6 million, half of which he attributed to new growth construction.

"You want to keep your commercial and industrial tax base healthy," he said, adding that the base helps to offset the tax burden.

Deborah Dachos, director of Planning and Community Development, said the town's current economic climate offers an opportune time for new development.

"This is the ideal time for new construction because of the cost factor," she explained. "Labor and materials are cheaper and if people have access to financing it's an ideal time for new projects."

Baldini cautioned, however, that the new assessments and tax rate reflect a "historical perspective rather than a current perspective."

"Calendar year 2008 sales, especially those that have occurred later in the year, are representative of the current real estate market, which has seen longer marketing times and more pronounced downward pressure on prices," he explained. "This stress in the market is mirrored by an increase in the number of foreclosures in the past three years from four in 2006, 12 in 2007 to 26 in 2008."

Baldini attributed the foreclosures to sub-prime mortgages and called the overall town market "stable."

He noted that this was an update year for real estate values and another update will be completed in 2012.