Values Compared to Last Year
Did Values Change?
The "slump in the market" repeatedly referred to in the media never really affected Needham except to level off the ever upward spiral for two years before the market surged ahead again in years 2017, on into the first three quarters of 2021. The Needham Assessors conducted a DOR mandated sales review during Fiscal Year (FY) 2022. With strict oversite from the Massachusetts Department of Revenue, a comprehensive review and statistical analysis of all sales from the calendar year 2020 was done to ensure that the values of unsold properties in Needham reflected what was taking place in the Needham real estate market during the calendar year 2020. This statistical analysis was thoroughly reviewed, and officially certified, by the Department of Revenue before they permitted the issuance of the third quarter (December 2021) tax bill. Adjustments for the FY 22 values, were based on a comprehensive review, with appropriate adjustments made, to reflect market activity from the calendar year 2020 sales. The analysis of calendar 2020 sales showed that the upward adjustments for the prior period in the residential market was sufficient to keep those values relatively stable for FY 22.
Effects on Residential Property Values
The average residential single family property value increased by 1.9% to $1,016,185. This year's assessments represent the market value of properties as of January 1, 2021, and reflect the continuation of a very strong residential market in Needham. It is important to note that while the average single-family home value increased by 1.9%, there are individual differences in valuation changes among neighborhoods and different types of property. In some neighborhoods, recent sales, changes to the cost tables used to determine building values, and property inspections after a sale, or recent permitted upgrades, have resulted in value increases of greater or lesser than 1.9%.
Older properties with limited maintenance and/or improvements had been adjusted in value in some areas to reflect a possible reluctance of developers to invest as they once did in properties to be demolished for new construction. This downward trend, based on more recent sales data of "teardown" properties, appears to be reversing itself dramatically. On the other hand, new high-end properties, while taking longer to sell in some cases, are still rising in their market value, while resale value of early 1990's high-end homes had slipped slightly in some areas; they have bounced back recently. Downward adjustments, albeit less dramatic, were also made for four years running too many of Needham's older, larger condominium complexes. Based on the calendar year 2019 and 2020 sales market data, that trend appears to have reversed itself dramatically as well.
Sales data from January to September of 2021 reflects a healthy stabilizing, at a high level, in the median sale price of single-family homes in Needham. Early analysis of calendar 2021 residential sales indicates a stable "seller's" market overall is continuing. In addition to the market-driven uptick of overall prices, a noticeable price jump in a large number of "teardown" land sales will likely warrant an adjustment to some neighborhood land values during the fiscal year 2022. This trend also appears to be continuing, but it should be noted, in some cases, buyers, actually intending to live in the existing home on the property, are outbidding "Teardown" builders as a result of losing "bidding wars" for properties in other towns with even higher values than Needham. There is no definitive evidence as of yet as to the effect recently passed zoning regulations on teardown land values, but some upward adjustment of land values going forward may be in the offing.