Charlestown Real Estate update - no good news

Home values continue to fall, rentals still rare and costly

Charlestown housing market continues to crash

By Will Collette

While Charlestown’s Town Council majority and Planning Commission devote their time and energy to fighting against affordable housing – and against tax relief for struggling middle-class homeowners – Charlestown’s problems just keep getting worse.

According to new data from Zillow.com for the month of December, Charlestown home values fell 4.5% from their levels one year prior. Currently, Zillow shows three foreclosed homes up for sale. Realtytrac.com lists four properties that are due to be sold at auction.

Realtytrac.com shows a total of 16 bank-owned properties in town; 14 of them are for sale at less than $216,000, the approximate home price considered to be “affordable” to a family at 80% of the town’s average median income.

Charlestown Town Clerk Amy Weinreich’s data for 2011 shows that Charlestown had 17 foreclosures in 2011, tying the all time record set in 2008. We have had one foreclosure in the month of January.

from the Providence Journal

But according to the Providence Journal, in an article that ran on January 24, 2012, behind their new subscription wall, Charlestown’s numbers were actually worse than what Zillow showed.

According to the ProJo, Charlestown had the worst drop in sales price of any mainland South County community, with median sales prices in town dropping from $347,500 to $308,750 in 2011, a fall of 11.15%. Block Island saw its median sales price drop by nearly a quarter. Read an open access short version of the ProJo article by clicking here.

The Journal also noted that it took longer to sell a house in Charlestown, going from 116 days to 134, a rise of 15.5%.

Zillow.com shows 147 homes currently for sale, up from their last report showing 143. Of those properties, 31 are priced at or below the “affordable” level – down from 44 in their last report. Nearly all of those affordable units are either small condominiums or trailer homes.

For the third cycle in a row, Zillow.com shows no rental units. A new issue brief by HousingWorksRI reports that there is a rental shortage across RI. When people lost their homes, they sought to rent and that rush of new rentals led to scarcity and dramatically increased prices. Housing Works reports that one out of four renters are now living in rental units they really can’t afford.

For the average Charlestown homeowner, none of this is good news. It means that your property is probably worth less than it did when you received your new assessment last spring. It means the equity you have in your home – for many, their retirement nest egg – has fallen. It means that more Charlestown homeowners are underwater – with mortgages higher than the value of their homes.

It means you will get less money for your home than you want and that your home will take longer to sell.

But for Charlestown’s elite in the CCA, and their champions, Council President Tom Gentz and Planning Commissar Ruth Platner, it means that Charlestown is now awash in affordable housing.

Whoopee! Why create more affordable housing when the market is doing it for us, they reason. Now all we need to do is to get the state of Rhode Island to recognize that more and more of our houses should be re-defined as “affordable” as the housing market continues to flounder.

When you are a homeowner whose home has lost perhaps one-third or more of its value since the housing crash, you face more difficult challenges than you did during the housing boom. You could reasonably hope to sell your home for a good price, but more importantly, you had equity you could use to borrow for your kid’s college tuition or for car repairs or home maintenance. But now, that’s all gone, and maybe along with it, you’ve lost your job or had your hours or benefits cut.

Last July, middle-class homeowners saw their property taxes rise, ironically, because home values declined. Charlestown’s loss of overall home value meant the tax rate had to go up, and the brunt of the resulting tax increase fell on homes in the $150,000-$500,000 range, while million dollar properties saw little or no tax increase – and some even got a tax reduction.

The Town Council majority consisting of the two CCA-backed members, Tom Gentz and Dan Slattery, with the support of their ally Lisa DiBello, rejected a proposal by town Democrats to restore the balance and give middle-income Charlestown homeowners a break through a $1000 Homestead Tax Credit.

Is it “class war” to want tax justice? Gentz, Slattery and DiBello, backed by a “riot of the rich” non-residents organized by the CCA and RI Statewide Coalition, seem to think it is.

Perhaps they are untouched by the problems of the average homeowner. Maybe they don’t understand. But more likely, I think, they just don’t care.