Assessors See Drop In Sales Prices In Stage Harbor Road Area
by Tim Wood
CHATHAM – The sale of homes in the Stage Harbor Road area for considerably less than the assessed value has caught the attention of the town's assessing department.
Homeowners in the neighborhood are being polled on how they feel about a National Historic Register District nomination. The Massachusetts Historical Commission has already ruled that the area is eligible for listing on the National Register, which paves the way for a higher level of regulatory review of renovations or demolitions of historically significant structures, raising concerns that just the possibility of a nomination is impacting property values.
And it's not just the Stage Harbor Road area. A handful of sales of antique homes more than 100 years old for less than the assessed value raised a red flag for assessors.
“We're just at the beginning stages of our research,” cautioned Assessing Director Ardelle Kelley. Age and historic district status are among many factors that will be examined, including location and condition.
Two sales on Stage Harbor Road and one in the Old Village over the past year were below assessments. An 1860 home at 356 Stage Harbor Rd. sold for $700,000 in July, 54 percent of its $1,292,300 assessment. A home at 280 Stage Harbor Rd., built in 1907, sold in October for $790,000, 61 percent of its $1,284,200 value. Last December, an 1870 house at 151 Main St. sold for $1.7 million, 92 percent of its $1.9 million assessed value.
The numbers are far from conclusive, however. A 1780 home at 223 Stage Harbor Rd. that was renovated and restored in the past few years sold in October for $2,250,000, almost 10 percent higher than its $2 million assessed value.
Several elements may be at play here, including changing tastes of homebuyers. While the Stage Harbor Road National Historic District proposal and the historic commission's enforcement of the town's demolition delay bylaw are no doubt an issue, the dwindling pool of buyers interested in old homes may be a bigger factor.
“The pool of buyers for older homes is smaller and continues to get smaller,” said Tony Guthrie, an agent with Robert Paul Properties. Antique homes can be a “tough sell,” added Chris Rhinesmith of Pine Acres Realty, because they appeal to specific buyers. “They either want them or they don't,” he said.
While a ruling that the South Chatham area is eligible for nomination as a National Historic Register District has caused little controversy, Stage Harbor Road homeowners have pushed back against the eligibility nomination for their neighborhood. Substantial renovation or demolition of any home in town more than 75 years old already triggers the demolition delay bylaw, which allows the historic commission to postpone razing of a structure deemed to be historically significant by up to 18 months. The Massachusetts Historical Commission ruling that the Stage Harbor Road and South Chatham areas are eligible for National Historic Register District triggers a higher level of review; at its discretion, the historical commission can refer alterations or demolitions within those areas to the Cape Cod Commission, which has the authority to say no to projects.
William Riley, the attorney for James and Cynthia Marsh, whose 271 Stage Harbor Rd. home is under a demolition delay, said owners in those two neighborhoods now have “all the disadvantages of being on the National Register and none of the advantages,” which is not likely to enhance property values.
“You effectively give up control of your property,” he said.
Such an important decision, which could end up costing the town significant property tax dollars, shouldn't be spearheaded by a volunteer committee, he said (the volunteer historical commission sought the eligibility determination from the Massachusetts Historical Commission). While the local commission is “actually pretty reasonable in working with property owners,” Riley said, “a decision like that with the consequences we're seeing should reside with the selectmen.”
Historical Commission Chairman Frank Messina said he's concerned about the assessing department's analysis; condition, not just age, can be a significant factor in determining a sale price. “Age is exactly one of the [many] factors,” he said, and it's unfair to tar the commission with unilaterally lowering property values. There have been almost a half dozen demolition requests on Stage Harbor Road in recent years, which led to concern on the commission about the integrity of the historic street. More than 30 18th and 19th century homes between Cross Street and Bridge Street have been determined to be contributing structures to a potential historic district.
The commission judges whether to invoke the demolition delay bylaw based on the historical significance of a structure, Messina said, and have allowed several to move forward because the buildings were determined not to be historically significant. A few years ago, when the town was proposing to build a sidewalk along Stage Harbor Road, there appeared to be support in the neighborhood for a National Register nomination, he noted. But after two high-profile demolition delays, the sentiment in the neighborhood appears to have changed.
Messina pointed out that up to 25 percent of a historic home can be altered before the commission's jurisdiction kicks in. When that happens, the group tries its best to work with homeowners to preserve the most historically significant portions of a structure. Sometimes that doesn't work out, and attempts to move a building to another site are also fruitless.
That's what's been happening with the Marsh house, Riley said. Newspaper ads have been published for weeks seeking someone interested in moving the home, and while there were some inquiries, none have worked out. Retaining the historic front of the home wouldn't work with the owners' plan for more modern living space.
Preserving older homes with smaller, sometimes warren-like rooms don't mesh with buyers' interest in having more open, modern living space, Guthrie said. He pointed out that newly built homes have been selling relatively quickly – three new homes along Crowell Road sold within a few months, one even before it was built – while older homes tend to remain on the market longer. New construction is “much more important than location now.”
Buyers also don't want to wait out a demolition delay or worry about potential structure issues in an older home. “It's a vacation home; people want turnkey, they don't want headaches,” Guthrie said. The complex regulatory process is also a factor, added Rhinesmith. “Antique homes are a tough sell from that perspective,” he said.
Rhinesmith has owned three antique homes and loves them, but the pool of buyers for that type of house is growing shallower, he said. “It's a more polarized market.”
Guthrie said builders are the prime market for older homes now, since they are willing to wait out a demolition delay, but they also don't want to pay “retail price.”
Sales from this year will factor into assessments that will be adjusted before the next tax rate is set next year. Kelley said that all sales data is reviewed by the state department of revenue before the new rate is set. Messina said he was meeting with Kelley today (Thursday, Dec. 14) to gain a better understanding of the process. Whether assessments on homes more than 100 years old are lowered across the board will depend on that sales data, as well as other factors, including the historic district proposal.
If that happens, it will be unusual, said Sarah Korjeff, a historic preservation specialist with the Cape Cod Commission who has worked with the historical commission on the Stage Harbor Road and South Chatham National Register District proposals. Studies not just in New England but across the nation have shown that historic districts tend to stabilize property values, and even lead to gradual increases, she said.
“The evidence really shows that it's more likely to be a benefit in terms of assessed values and stability,” said Korjeff. She hasn't heard the concern from other Cape towns, she added.
Harwich Assessor Donna Molino said she hasn't seen sales prices of antique homes dropping below assessments in her town. Older home sales are “pretty much in line with regular sales,” she said.