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Demand drives up property values in Lebanon; citywide assessment sees average increase of 18%

Valley News Staff Writer
Published: 11/2/2020 9:11:38 PM
Modified: 11/2/2020 9:26:34 PM

LEBANON — City officials and Upper Valley real estate agents say a high-demand housing market and rising property values are to blame for a nearly 18% increase in Lebanon’s taxable value.

Homes — which experts have long warned are in short supply — are now being sold the same day they’re listed, and prices continue on an upward trajectory, according to Rick Vincent, Lebanon’s chief assessor.

The tight market, he said, is partially reflected in the city’s revaluation, which occurs every five years under state law. The new assessments are supposed to offer a “snapshot” of market value on April 1, before the full effects of the COVID-19 pandemic were known.

“What we’re starting to see is a more rapid increase in property values,” Vincent said during a phone interview Monday. “The area is growing substantially.”

Lebanon residents recently received new assessments with property values that will be reflected in their December tax bill. While the city’s taxable land saw an overall 17.8% increase in value since 2015, most property owners were hit with varying figures depending on where their parcel is located, what type of building it houses and how it compares to recent sales.

For instance, a home that was once valued at $240,200 on Crafts Avenue in West Lebanon is now assessed at $263,500, an increase of 9.7%.

Over on the other side of the city, a home in the Hillcrest Acres neighborhood near Lebanon Middle School saw its assessment go from $233,300 to $274,200, which amounts to a 17.5% increase.

However, city officials say people won’t see their property taxes increase by those amounts. The state recently set a new, lower tax rate for Lebanon that appears to be keeping homeowners’ tax increases to the hundreds, not thousands, of dollars.

“It’s been relatively calm,” Vincent said of the response he’s received.

“Most of the taxpayers I’ve spoken with had questions on why the assessments went up,” he added. “Many of those taxpayers understood that property values were increasing.”

Jolin Kish, who owns 10 rental properties in Lebanon, said the assessments aren’t “drastic” like the ones in neighboring Hanover last year.

That revaluation saw some property values jump by more than 50%, and resulted in the town’s board of assessors receiving than 400 appeals for rebates.

Meanwhile, 65 property owners filed a petition with the New Hampshire Board of Tax and Land Appeals to compel the town to redo the assessments.

News of the higher Lebanon assessments was not a surprise to Buff McLaughry, chief operating officer of Four Seasons Sotheby’s International Realty in Hanover.

Last fall, he and real estate agent Lynne LaBombard reported a 10% decrease in the number of housing units sold for under $299,000 within the Upper Valley’s core communities.

The number of homes on the market within that price range dropped from 274 to 247 since 2014, raising demand and prices.

The housing market has only tightened since then, McLaughry said last week.

Since January, the housing inventory in Lebanon dropped by almost 15%, “close to a new low,” he said. Meanwhile, prices are on the rise.

“We have seen a very active market this year with a continuing decline of inventory,” McLaughry said.

The one area that isn’t seeing growth — at least temporarily — is the commercial real estate sector, particularly office space that now goes empty as more people work remotely.

“It’s obvious that a lot of businesses have closed up completely or they’re just working remotely,” Vincent said. “That’s something that I’m going to be watching.”

City Councilor Clifton Below, the managing partner of the One Court Street building downtown, said that while his profits have decreased under the pandemic, he isn’t yet worried about the new assessments. His building’s assessment increased by $497,500 to over $3.7 million, a rise of about 15.4%.

“It didn’t go up all that much,” said Below, Lebanon’s assistant mayor, who added that the overall commercial market is more worrisome.

“It’s hard to be a commercial property owner and not be anxious about the situation, about what the future holds,” he said.

Retail and commercial centers, including Route 12A and Centerra Marketplace, also saw increased values in the reassessment.

Meredith Johnson, whose family is a major property owner in West Lebanon, said she is hopeful the new tax rate will make the increases more “palatable.”

“It seems like this should be the case, as no one will benefit from further harming businesses that have already faced temporary forced closures, reduced hours and increased operating costs,” she wrote in an email. “We fear local businesses can’t withstand many more burdens on their bottom line and survive.”

Vincent, the assessor, said it’s possible businesses’ hardship may be reflected in a future assessment. By law, assessments have to be within 10% of market value and a slumping market or rising home values may trigger the city to perform a revaluation before 2025, he said.

Lebanon property owners can appeal their assessments by filing an abatement application by March 1. The application can be found at www.nh.gov/btla under “forms.”

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.

Valley News

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