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Revaluation Resources — City Website

Home » Government + City Departments A-M > Assessing Department » 2022 Full Measure & List Appraisal and Revaluation

2019-2022 Full Measure & List Appraisal and Revaluation

Project Updates & Milestones:

***Important Update***
The City of Nashua lifts suspension of Interior Inspections for the 2020-2022

Revaluation
The City of Nashua has selected Vision Government Solutions to assist with the City-wide 2020- 2022
revaluation project. Vision’s Appraisal division will be working closely with the Assessing Department to
make the process successful for the City.

The City has lifted the suspension of Interior inspections and Vision Government Solutions will send a letter
to the property owner of properties having received an exterior inspection during this period requesting that
the property owner cail to arrange for an interior inspection. Letters will be sent by Ward starting with Ward 1
in July this process will continue into early 2022.

Exterior data collection is also finalizing as data collectors are in Ward 9. Inspections for Commercial and
industrial Properties continues throughout the City.

DRA Revaluation Guidelines During COVID-19

202 16 Amendmen lical Revaluation ntr:

Revaluation Resources — City Website (cont'd)

GOV Board of Assessors Meeting 6/4/2020 (Video) Bi-Weekly Status Reports

2020-2022 Revaluation Project Update - June Perry - Vision Governmd ° Nashua NH November 03 * Nashua NH Aug 19, Status
Vi deo) Status Letter 2021 letter 2021

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Quarterly Status Reports to NH BTLA abe Sst Nashua NH Dec 31. status

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© 20210713 City of Nashua Revaluation Status Report to NH BTLA Nashua NH Sept. 27, Status

Letter 2021 * Nashua NH Dec 9. status
© 20210406 City of Nashua Revaluation Status « Nashua NH Feb 4, Status letter 2020
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° Nashua NH Feb 11, Status letter 2020

» 20200928 City of Nashua Revaluation Report letter 2021 ° Nashua NH Nov 13. status

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GOV Board of Assessors Meeting Videos 2021

¢ 20200628 City of Nashua Revaluation Status Report to NH BTLA

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The Revaluation Process

There are five major phases to a municipal revaluation: Data
Collection, Market Analysis, Valuation, Field Review and
Informal and Formal Appeal Hearings. During these phases
many tasks will be implemented in order to successfully
complete the revaluation.

Data Collection Market Analysis
Valuation Field Review Informal
and Formal Hearings

Phase 1: Data Collection

The first phase, Data Collection, began the last week of
February 2020.

During this phase data collectors also known as “Listers” go

to each property and physically inspect and verify the
measurements of the exterior of each building.

Digital imaging of each property is also taking place as part
of this project.

Nashua has approx. 28,926 properties and the data
collection phase of this project is time consuming, it will
take about two years to complete.

Phase 2: Market Analysis

A variety of resources are used to analyze the real estate
market. While the physical data is being collected by Vision
Listers, Appraisal Personnel will be analyzing property sales
taking place over the previous year to determine which
market factors influenced property values.

Once all the data is collected and reviewed for accuracy,
appraisers will determine land values and set
Neighborhoods, which set the valuation levels of locations
throughout the City as determined by actual market
activity.

Phase 2: Valuation

Valuations are done using three recognized appraisal
methods: the Cost Approach, the Income Approach and the
Sales Comparison Approach. During this phase, individual
characteristics of the building are analyzed using
information gathered in both phases 1 and 2. Each property
is Compared to other comparable properties with similar
characteristics. Then the contributory market value of the
improvements is added to the previously determined land
values. This value is the final estimate for each parcel of
property, building and land.

Phase 4: Field Review

Field Review is the method of checking and re-checking
both the values that have been determined and the data
that has been collected. During this review, properties are
viewed in the field by experienced appraisers who
double-check uniformity, equity and accuracy of
information.

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Phase 5: Informal and Formal Hearings

Once the data collection, market analysis, valuation and field review phases
of this revaluation are completed and approved by the Assessor's Office,
mid to late July 2022, property owners will receive a notice of their new
assessment. At this time, anyone with questions concerning the revaluation
process or about the data collected on their property will have an
Opportunity to meet with a member of Vision's staff to discuss their
questions and concerns. This informal hearing is the first step in the appeal
process if the property owner feels their assessment is inaccurate. The
informal hearings will take place in late July, and during August 2022. A
follow-up notice will be mailed to owners who participate in an informal
hearing, or properties that have been changed based upon additional
information supplied to Vision and the Assessor's during the hearing
process.

REPORT OF REAL ESTATE MARKET TRENDS
AS WE APPROACH THE 2022 CITY-WIDE REVALUATION

We are still one year away from finalizing property values for the 2022 city-wide revaluation. Citizens, taxpayers,
and municipal officials are understandably curious and concerned with the final results of the revaluation. All
concerned parties are attempting to plan for budget provisions. Vision Government Solutions (Vision), the
contracted firm conducting the revaluation project, is still in the data collection phase of the project. Vision will not
enter the statistical analyses phase for valuation for several more months.

The valuation date for the revaluation is April 1, 2022. It is important to analyze the valid, arm’s length property
sales that occur up to April 1, 2022, so that the most recent sales data is utilized in any sales analysis. The real
estate market, especially the residential market, has been very hot for the past year, with considerable increases in
market values being realized. However, we cannot accurately predict what the real estate market will experience
between today and April 1, 2022. Additionally, different classes of property (single-family residential, commercial
office buildings, retail properties, etc.) can experience different trends, based on demand. One class of property
can be experiencing very high demand, while another class has very little demand. As a result, property value
trends can be entirely different between property classes.

For these reasons, it is very difficult (and unwise) to attempt to predict what the real estate market will be next
April. An incorrect prediction can wreak havoc on budget planning. However, we can analyze current market
trends, and this report attempts to provide some explanation and verification of current market trends, overall and
by class.

Pursuant to state law and the state constitution, each municipality must complete a general revaluation of all
properties at least once every five years. Once the values are established, the municipality must hold those
assessed values until the next revaluation. During the five year period between revaluations, the real estate
market can experience different trends, which can affect market value. Strong demand for real estate can increase
property values, while weak demand can lower property values. An assessment/sale ratio study compares the
assessed values established during the last revaluation to current market values. Example — a property with a
market value of $140,000 in 2018 is assessed at $140,000 during the 2018 general revaluation. But strong demand
for real estate after 2018 creates upward pressure on the value of properties, so in 2021 the market value of that
property is now at $200,000, as determined by a 2021 sale of that same property. The assessment/ratio for that
property would be 70% ($140,000 assessment / $200,000 sale price).

| have performed two sales/assessment ratio studies for recent sales, in order to estimate a current ratio. These
studies compare the current assessed values (established during the 2018 city-wide revaluation) to current market
values; One study involves all sales from April 1, 2021 to July 7, 2021. The other study involves all sales from
October 1, 2020 to July 7, 2021. | did not include older sales, since doing so would skew the results. The two
reports show a clear reduction in the ratios from the October 1, 2020 study and the April 1, 2021 study. A
reduction in the ratio tells us that property values are increasing. The assessed value is an estimate of market value
for each property as of April 1, 2018, the last city-wide revaluation date. The assessed value of recently sold
properties is compared to the sale prices of those properties, giving us a comparison of assessed value to current
market value. Listed below is a summary of my findings. NOTE - MANY OF THE SALES IN THE OCTOBER 1, 2020
REPORT HAVE NOT YET BEEN VERIFIED BY THE ASSESSING DEPARTMENT, AND NONE OF THE SALES IN THE APRIL
1, 2021 REPORT HAVE BEEN VERIFIED. IT iS POSSIBLE THAT SOME OF THE SALES ARE NOT VALID SALES.
HOWEVER, | DID NOT INCLUDE SALES THAT WERE KNOWN INVALID SALES (FAMILY TRANSFERS, FORECLOSURES,
ETC.)

The two study groups (October 1, 2020 and April 1, 2021) are broken down into several sub-groups. The first
report will be a ratio study of ALL sales. The groups are then broken down by Land Use Code (LUC) and by Class (All
Res Sales and All Commercial/Industrial Sales, etc). The Class/LUC breakdowns are identical in each report, so that
there is a clean comparison between the October 1, 2020 and the April 1, 2020 study groups.

SUMMARY

CATEGORY October 1, 2020 APRIL 1, 2021 CHANGE
ALL SALES MEAN RATIO 77% 12% -5%
MEDIAN RATIO 74% 69% -5%
ALL COMM/IND SALES MEAN RATIO 93% 90% - 3%
MEDIAN RATIO 82% 76% -6%
OFFICE BLDG SALES MEAN RATIO 1.18% 1.18% 0%
MEDIAN RATIO 1.18% 1.18% 0%
ALL RES SALES MEAN RATIO 76% 71% -5%
MEDIAN RATIO 74% 69% -5%
CONDO MEAN RATIO 77% 69% -8%
MEDIAN RATIO 77% 68% -9%
CONDO NL MEAN RATIO 76% 72% - 4%
MEDIAN RATIO 75% 70% - 5%
MANUF HOUSING MEAN RATIO 70% 59% -11%
MEDIAN RATIO 58% 57% -1%
SINGLE FAM MEAN RATIO 76% 71% -5%
MEDIAN RATIO 74% 69% -5%
2-FAMILY MEAN RATIO 76% 70% -6%
MEDIAN RATIO 71% 67% -4%

The above data shows that the ratios decreased approximately 5% for most of the residential categories and the
overall ratio. The Office Building category saw no change, but that is because the same five sales were used in the
two studies. The mean ratio for Commercial/Industrial sales declined by only 3%. These statistics tell us that
property values are increasing. Overall, property values increased approximately 5% between October 1, 2020 and
April 1, 2021. With a Mean Ratio of 72% and a Median Ratio of 69%, this means that current assessed values are
approximately 70% of market value. A property worth $200,000 on the market would have an assessed value of
approximately $140,000, on average ($200,000 market value x .70 = $140,000 assessed value).

It is very difficult to determine a trend for commercial/industrial properties for two reasons; 1 — different classes of
commercial and industrial properties can vary tremendously in demand. For example, Retail space and Office

space may be less desirable at this time due to weakened demand. 2 — The COVID pandemic may have had an
effect on demand and/or lease rates as certain segments of the commercial/industrial market were more affected
than others.

The studies clearly show increasing residential property values. The residential value increases appear to be at
least slightly more than commercial property value increases. This is not surprising. However, predicting future
trends and where the ratios will be for April 1, 2022 (the valuation date for the city-wide revaluation) is difficult. |
see nothing at this time to indicate that residential property values will cease their recent increases, and | do
anticipate the sale/assessment ratios to continue to decline, but much can happen between now and April 1, 2022.