by Doug McClure
HARDWICK – In the one year since the first COVID Declaration of Emergency, the sales price of homes in Hardwick relative to appraised value has spiked from historical averages according to state-provided data.
In December 2020, homes sold for 153% of what they were appraised for, on average. Since last June, the average price a home was purchased for has exceeded the appraised value for every month – with every month seeing more than one single-family under-six-acre home sold, which has not happened in the past five years.
At present, four of the five listed homes in Hardwick are priced significantly above appraised value and far above what any recent sale value. The widest gap is at 69 Lower Cherry Street, which is on the market for $396,000 with an appraised value of $68,400 of which the majority is in the land the two homes sit on. The most recent sale was when Village Builders of Wolcott purchased it for “ten and more dollars” in April 2020. A representative of Hardwick listers said appraisals take place on April 1 and “both buildings were gutted and in tough shape.” That person added that “The property is on our list for inspection and new appraisal date of April 1, 2021. For tax year 2021/2022, the assessed value will more than likely change.”
Another nearby property is on the market for $64,000 over appraised value, and a third property for $102,400 over appraised. The fourth property has been the subject of several agenda items at select board meetings; due to its proximity to the dormant railway which is in the VTrans right-of-way, it will be difficult to create a driveway on the property, which is landlocked. The building is priced at $75,000 and was purchased for $12,000 at tax sale. Its appraised value is $29,000.
The Grand List is based on appraised values. Increases to the Grand List would minimally change the smaller of the two tax bills residents get, the municipal bill. More significantly, if the state determines Hardwick is appraising too low for market realities it would impact the education property tax, which is heavily swayed by “Common Level of Appraisal” (CLA). Hardwick’s CLA is estimated at 94.15% percent in the Orleans Southwest Supervisory Union’s budgets for Hazen Union and the Orleans Southwest Union Elementary School District. A drop in the CLA would increase the education property tax.
The state does not mandate a town-wide re-appraisal unless the CLA hits 85 percent, but as select board chair Eric Remick noted “If the five data points [the Gazette has] identified in Hardwick turn out to be part of a trend (which I think remains to be seen), then this will drive our CLA down over time and will trigger an early town-wide reappraisal.”
The tax consequences of a low CLA are more pronounced than an increase in the Grand List. If Hardwick’s CLA hit 86%, a point above the threshold, that would increase a $100,000 home’s education property tax by over $180, based on the FY2022 estimates adopted at Town Meeting.
A representative of the New England Municipal Consultants, who works as an appraiser for Hardwick, said the last assessment was done in 2016 and “there are no plans for the next town-wide reappraisal.”
Hardwick is not alone. Zillow market reports show that home prices increased in all ten towns covered by the Gazette. Excluding the most and least expensive properties and focusing on what Zillow defines as the “middle price tier of homes,” Hardwick’s typical home price increased by nearly six percent, and other towns’ closer to ten percent, in the past year. Zillow projects that prices in Hardwick will increase 11.2% in the next year.