State stats depict plunge in property values
Massachusetts property owners lost a combined $106 billion in value during four years of the recession, according to state data that sheds new light on how deeply the economic downturn damaged the worth of Bay State real estate.
By comparison, that’s the same amount China reportedly budgeted for national defense this year and the total earmarked for education in the 2009 federal stimulus plan.
Total values for 2008 to 2012 dropped 10.9 percent statewide, according to data that the Department of Revenue’s Bureau of Local Assessment compiles every two years on the estimated value of all taxable property in the state.
Recent figures indicate the downward slide has reversed. The real estate market showed signs of recovery in 2012, the best year for home sales since 2006, according to the Warren Group, which tracks sales and prices and publishes Banker & Tradesman.
The median price for a single-family home in Massachusetts also ticked upward 1.8 percent last year, to $290,000, the Warren Group said.
“It’s been steady gains in terms of activity in the market throughout all of 2012,” said Warren Group CEO Timothy Warren Jr.
Yet the state data on values suggests the road to recovery will be a long one.
Massachusetts seems on par with the rest of the nation in that sales and values, while improving, still are well below pre-recession levels, said Christian Weller, a professor of public policy and public affairs at UMass-Boston’s McCormack Graduate School.
“We’re starting from very low levels and we have a very long way to go,” said Weller, also a senior fellow at the Center for American Progress.
The Department of Revenue figures are based on local assessments and property sales reports from earlier years – for example, its 2012 property valuations are based on assessments as of Jan. 1, 2011, and all sales that occurred in 2010.
Massachusetts uses these estimates to help figure out how much towns and cities will receive from several state aid programs.
The 2012 valuations released in January will help determine Chapter 70 school funding and library aid, among other things, in fiscal 2014, which begins in July. The higher the values in proportion to the rest of the state, the less aid.
The valuations also offer a peek at how property owners have been faring.
Total valuations statewide peaked in 2008 at $1.1 trillion before plunging 5.3 percent over the next two years and another 4.8 percent between 2010 and 2012. That left valuations at a total of $975.7 billion last year.
Values declined in 315 towns and cities, or nearly 90 percent of communities, over the last four years, the figures show. The impact varied widely, with lower-income cities beyond Boston hit much harder than communities within the Rte. 128 belt.
In Brockton, values dropped a startling 44.1 percent in four years, more than any other city or town, while properties in Taunton also lost about a third of their worth.
Wealthier suburbs felt considerably less pain. In Arlington, values declined only four-tenths of a percentage point from 2008 to 2012. Newton property owners only lost 2.1 percent of their estimated value.
The few dozen municipalities that actually saw property values climb during the same period include Brookline, Cambridge, Cohasset, Needham, Weston and Winchester.
This mirrors the impact of real estate problems across the country, according to Weller.
“There is clearly sort of a divide in the state,” he said. “The recovery is definitely not even.”
Warren said there is other evidence that the real estate market, while rebounding, has a long way to go. The median price of a single-family home in Massachusetts peaked in 2005 at $355,000, he said. December’s median price, while 12 percent higher than the same month a year earlier, was only $300,000.
Single-family home sales peaked at about 65,000 in 2004, compared to a little less than 47,000 last year, Warren said.
The best thing for real estate would be well-paced, stable growth, not the unprecedented spike seen in the mid-2000s, said Kimberly Allard-Moccia, president of the Mass. Association of Realtors and an owner/broker at Century 21 in Braintree.
The association has seen other signs of progress, such as significant declines in single-family home and condominium inventory last year compared to 2011, she said.
It’s also a good signal that December single-family home sales were up 13 percent compared to the same month a year earlier, in spite of uncertainty about the so-called fiscal cliff and the presidential election, Allard-Moccia said.
“That shows to us that buyers are seeing good value on the market,” she said. “That’s a good sign, because it goes to buyer confidence.”
(David Riley can be reached at 508-626-4424 or email@example.com.)