Real estate property values are down 26 percent in Naugatuck in the past five years, according to revaluation of borough property that was recently completed.
An overview of new property valuation numbers was released Tuesday night at the Board of Mayor and Burgesses meeting at Town Hall. The assessor’s office will send out new property assessments to all Naugatuck real estate property owners on Friday.
The numbers released Tuesday show the largest drop in value was in residential property, which went down 29.1 percent since 2007, the most recent revaluation since this year’s study.
The revaluation was a mix of statistical and physical studies. It asked people to report any new additions or property changes – 62 percent of residents responded - and evaluators inspected only properties sold between Oct. 1, 2010 and Oct. 1, 2012, of which there were 368.
The report shows that utility property, such as that owned by the water company, dropped 19.5 percent. Industrial property values went down 17.6 percent, and commercial property values went down 3.8 percent. Because there are many more commercial properties than industrial, the weighted average of decline between commercial and industrial properties was about 5 percent, said Naugatuck Assessor George Hlavacek.
All told, in 2007, the total value of real estate property in Naugatuck was worth $1.8 billion; it is now worth $1.3 billion, a 26 percent drop.
Borough officials warned, however, that taxes will likely not go down anywhere near the rate of assessments.
Burgess Ron San Angelo, former mayor from 2003-07, said the same amount of taxes will likely need to be collected, so the mill rate will likely have to go up. That means many property owners might not see a tax break at all.
“I just want to make that clear to all residents,” he said.
Naugatuck officials, who allocated $203,000 for the revaluation study, will set the mill rate once they set the budget in the spring. It is at that point that Naugatuck residents will figure out how much tax money they will owe in the 2013-14 fiscal year.
The borough contracted with Tyler Technologies to conduct the revaluation. Eric Hardy, area manager for the Northeast Region of that company, said there will likely be a slight shift in the tax burden from residential to commercial. That’s because commercial property value didn’t go down nearly as much as residential property value.
Salim Serdah, Naugatuck project manager for Tyler Technologies, said a 26 percent drop in property values is about average for area towns.
People who have questions or concerns about their revaluation can make an appointment to discuss it with representatives from Tyler Technologies. They plan to have several appointment times that are convenient for residents and business owners.
Residents can also request a hearing from the Board of Assessment Appeals, though a discussion with the revaluation company is usually the first step.
After the 2007 revaluation numbers were released, hundreds of residents filed appeals because the revaluation was done at or near the peak of the housing market. From 2002 to 2007, residential property values went up 55 percent, commercial property values went up 72 percent and industrial property values went up 46 percent.
Since then, the housing market has dropped tremendously, and it shows in the revaluation study.
Evaluators say the average sale price of 444 homes in 2006 (reflected in the 2007 revaluation) was $223,480. The average sale price of 163 homes reflected in this revaluation is $170,176, a 24 percent decline.
Naugatuck property owners are relatively new to the revaluation process. That is because between 1979 and 2000, Naugatuck did not conduct revaluation fearing a spike in property values.
However, a state law was implemented that forced Naugatuck’s hand in part because the borough and other municipalities, such as Waterbury, waited so long between revaluations. The law states that the borough must conduct a revaluation of taxable real estate every five years.