Bangor assessor details 2025 property tax changes and market trends

[0:00] Speaker A (unidentified): City Assessors Annual Assessment Update, effective April 1st, 2025. New single residence neighborhood with 60 homes on Wildwood Drive and Firefly Lane off of Lancaster-Essex Streets. The purpose of this presentation is to inform real estate owners of how the real estate market has changed over the past year in Bangor and how the assessing department has changed assessed values to track the market. The goal when making changes is for each property's assessed value to be very near its market value. What do we use? Quality market information. We understand supply and demand changes. We've seen inflation and market prices. We make equality adjustments with the result being fair and equitable assessments. Maine's official assessment date is April 1st each year. The city's fiscal year runs from July 1st, 2025 to June 30th, 2026. This period is called fiscal year 2026. How is the mill rate tax rate determined? On an annual basis, the city's finance director reports to the assessor just the dollar amount that needs to be raised or collected from the local property tax on both personal property and real estate. This collection will fund the city and local schools, TIF fund operations, the overlay amount, the apportionment for Penobscot County, which Penobscot County requests in a report provided directly to the City. The municipal mill rate, when applied to your property, will cover all four amounts. Please note, the amount to be raised for school and school budgets has already been reduced by all the other funds expected to be collected over the fiscal year, from school funding, car registrations, permits, fees, state and federal grants, etc. How is the mill rate determined? For example, for fiscal year 2026, first of all, we have the total taxable amount of property in the city is just over four billion dollars. The amount to be raised with taxes is just over 74 million dollars. The amount we received from Main reimbursements is expected at two million nine hundred eighty one thousand eight hundred and eighty nine dollars. The actual tax for commitment then ends up being just over 71 million. That is because this figure is then divided by the city's total taxable value of just over 4 billion. And we see the formula below. 71 million divided by 4 billion results in a mill rate of 0.0177. And usually we express that in dollars per 1,000 of net valuation, or we would say the mill rate was $17.70 per thousand. Here we have the tax rate calculation form that this, the form is given to us by the state of Maine, and we employ that to do all the calculations. Example tax due for a single residence home. Individual tax bills are based on the property's taxable assessed value multiplied by the city's mill rate. For example, if a property has a land value of $35,000, the improvement or building value is $215,000, then the total assessed value would be $250,000. In this example, the property gets the homestead exemption, which is a deduction of $25,000. There is no veteran exemption,, no legally blind, and no renewable energy exemption. So here the taxable assessed value is $225,000. When we want to calculate the tax due, $225,000 times.0177 equals $3,982.50. So who pays what share of property taxes in Bangor? So the pie chart shows that four point nine percent of the taxes actually come back from the state of Maine in reimbursements. Forty six point three percent come from the commercial and industrial structures and land and business personal property. And then 48.8% comes from the residential 1-4 family homes, condos, PUD properties, mobile homes, and residential vacant land. How have tax shares shifted over time? Over the last eight years, who pays what share of property taxes in Bangor has shifted? Eight years ago, the commercial and industrial land, structures, and business and personal property paid the largest share of taxes. Now, residential 1-4 family homes, condos, PUDs, mobile homes, and residential vacant land pay the largest share by a thin margin. Homestead, Betty, and renewable energy reimburses from the state have been steady over that timeframe. Right, so here we have a graph. So the blue line would be the commercial and industrial properties, the gray line would be the residential type properties, and the bottom line, orange line, would be reimbursements from the state. And we can kind of see the big shift occurred in 2021, where residential properties picked up a larger share of the taxes, individual exemptions. For more information on property tax exemptions like homestead, veteran, legally blind, or renewable energy. Please contact the assessing department at 207-992-4209 and exemption will reduce the amount you have to pay in property taxes. Individual exemptions, so we have type, amount, and tax savings this year. Homestead, $25,000 value reduction, savings up to $442.50. Veteran exemption, a $6,000 reduction in the taxable assessed value, savings up to $106.20 this year. Legally blind value reduced $4,000 for tax purposes, tax savings up to $70.80. So for solar or renewable exemptions, they vary in their contributory value with the exemption matching the contributory value and not the original cost. Bangor's mill rate last year, the rate was $18.55 this year it's $17.70 that's a decrease of 85 cents or about five percent the same tax rate is used for all classes of property both real and personal frequently asked questions from the public in my community or neighborhood i privately pay for things like road plowing and maintenance trash pickup etc or i pay i private pay for a child's private K-12 education? Is there a state statute which would allow the city to apply a lower mill rate for my property tax calculation since I use fewer city services? The answer is no. At this time, one does not exist. All tax bills use $17.70 per thousand of taxable valuation code of ordinances 28-11 assessor appointment and qualification the city's single assessor shall be appointed by order of the city council for a term not to exceed five years no person shall be appointed to the office unless at the time of appointment he or she has been certified as a professional assessor for the state bureau of taxation in accordance with 36 MRSA 310 as amended. The Assessor Certified Maine Assessor Certificate Number 516. Duties and Powers. The City's Single Assessor shall exercise all powers and duties of Municipal Tax Assessor under the Constitution and the laws of the State of Maine. The Assessor shall also serve as Department Head of the City's assessing department and shall supervise the work of any assistant assessors and clerical staff of the assessing department. Assessed value. The assessed value or tax assessed value is a property's determined valuation used to calculate the appropriate amount of property tax. The value considers the sales of similar homes, square footage, condition quality, and current real estate market conditions to name just a few. Sale period real estate sales which occurred from July 2023 through June 2024 received the most weight in our analyses. Over 441 sales were considered. What is a property's sales ratio? So the sale ratio equals the total assessed value divided by the sale price. If your property's total If a property's total assessed value before exemptions is $250,000 and it sells for $357,000, the sale ratio is about 70% or undervalued by 30%. If a property's total assessed value before exemptions is $300,000 and it sells for $270,000, the sale ratio is about 110% or overvalued by 10%. City policy says overall sales ratio should be about 100%. As the market changes, so will the assessed values in an effort to improve equity. The target ratio was 91% for the April 1, 2025 adjustments. Assessor proposes to make valuation changes by neighborhood, location, and by property type or characteristic. Changes are necessary because some of the ratio studies showed a median ratio either below 91% or above 103%. As adjustments are made and the median ratio moves toward 91%, equity improves. Here we show single residence home sales. So the green bars are the average sale price and the blue bars are the median sale price and what we see that on the far right is calendar year 2024 and the average sale price was 298 000 an increase of 3.9 percent from 2023 and the median sale price was 270 000 an increase of 1.4 percent from 2023 23. Median sale price for a single residence home in Bangor during calendar year 2024 was 270 000, a year-over-year increase of 1.4 percent. Please note that the median sale price has half the sales being above it and half the sales being below it. So, notable market trends for Penobscot County. Below is a chart showing what was produced by the Federal Housing Finance Agency Home Price Index Calculator. It reported a 7.67% price increase for Bangor MSA for the period 3rd quarter of 2023 to the 3rd quarter of 2024. Price appreciation indicated by repeat sales in Bangor during period January 2023 to March 2025. So here we have the property type, the number of repeat sales, and the median annualized appreciation rate indicated by those sales. So for single residence homes, there were 13 repeat sales, and the median appreciation rate was 8.7% increase. Then we had condo PUD homes. There were five repeat sales, and they had a median appreciation rate of 8.9% increase. Mobile homes and parks, we had no repeat sales over that period. Multi-unit apartment buildings, we had 5 repeat sales. The median appreciation rate was 19.6% increase. Residential vacant parcels, we had 2 repeat sales and the appreciation rate was 22.1% increase. The last one was commercial industrial. We had one sale and the appreciation rate was 59.4% increase. Not typical of the market. Is my assessment equitable? There are two very good methods of determining this. First, compare your property value to similar properties that sold in Bangor over the previous year, between April 2024 to March 2025. Second, if no recent sales are available, compare your assessed value to other similar properties that are thought to be comparable. Remember, very few properties are exactly alike. The next few slides show a small number of properties that have sold twice over the past few years. Please note the percentage change and the time period. Union Street single-family home sold January 2023 for $165,000, sold again in November 2023 for $195,000. That's a positive 18.2% increase over 10 months. Westland Street Single Family sold August 2023 for $219,000. Sold August of 2024 for $232,500. That's a positive 6.2% increase over 12 months. French Street single-family sold May of 2023 for $320,000, sold November 2024 for $375,000. That's a positive 17.2% increase over 18 months. Conduskeg Avenue Single Family sold December 2023 for $470,000, sold June of 2024 for $500,000. That's a positive 6.3% increase over six months. Ohio Street condo PUD property sold June of 2023 for $247,500, sold April 2024 for $269,911. That's a positive 9% increase over 10 months. Market Street, a unit, sold January 2024 for $550,000. Sold October 2024 for $625,000. That's a positive 13.6% increase over 10 months. Summary of market appreciation. The previous slides provided an indication of the direction of change in market appreciation over the period from calendar year 2023 to calendar year 2025. Below are the annualized percentage change appreciation rates, property type and percentage change per year. Single family, 8.7%. Condo PUD, 8.9%. Multi-family or multi-unit small property, 19.6%. Manufactured home apart, no repeat sales. Neighborhood-specific adjustments were built into this year's assessed values to correct either undervaluation or overvaluation in a few cases. Sales from July of 2023 through June of 2024, a one-year study period, were considered and informed us on the need to make neighborhood adjustments for equity purposes. What is a neighborhood, and why are there neighborhood-specific adjustments? Here we show Kanduska Garden met and Bangor Gardens met. A residential neighborhood is a grouping of like properties that are impacted by similar location or market forces. We previously covered the development of a sales ratio statistic, and here we develop one for each neighborhood. If the neighborhood's median sales ratio is below 91% or above 103%, a neighborhood adjustment either up or down is considered. In a few slides, the impacted neighborhoods are described along with the percentage changes. The following summarizes the citywide adjustments which were made effective April 1, 2025. First of all, an increase to all residential and outbuilding values. Single-family residential properties increased 2%, plus they received a neighborhood adjustment when necessary. Then we had single-family condo PUD properties that increased 2% as well, along with a neighborhood adjustment when necessary. Two-unit properties increased 6.5%, plus a neighborhood adjustment. Three or more units increased 10.7%, plus a neighborhood adjustment. Manufactured homes and parks increased about 6.5%. There was an increase to all commercial industrial property values at various percentages. The depreciated building values are based on Marshall Valuation Service 2023 replacement cost data, plus a city adjustment of 6%. Overall, these two classes of property saw increases that ranged from 1% to 10%. The next three slides show all of the neighborhood properties grouped by neighborhood. A neighborhood is a city-defined area with properties having similar characteristics, location, use, style, and age, city's neighborhood code, neighborhood name, or streets in the neighborhood, median percentage increase in value, and property count. So here we have the first neighborhood, that's the top residential neighborhood, 86. It includes streets Bowling, Langley, and Mitchell. The median percentage change was 10.05%, and there were 48 properties impacted. At the bottom of this one, we show Neighborhood 63, which is Streamside, formerly Praise Mobile Home Community. Their change was 6.23%, and there were 19 properties impacted. Residential neighborhood 53, which is part of State Street, Yonge Street, and the start of Hogan Road. Median percent change was 6.12%, and number of properties impacted 16. And then the third neighborhood, residential neighborhood adjustment sheet, we look at neighborhood 38, which is Glenwood, Valley View, and Husson Avenue. Median change 3.37%, and number of properties impacted 122. And at the bottom, we see that there were a total of 9,492 properties impacted by the than neighborhood changes. And you can see this PowerPoint on the assessor's web page, and you can spend more time with these slides. But we do have a color-coded chart to show the percentage changes throughout the city. And then we have the same for commercial industrial neighborhoods. The top one is neighborhood 113. That includes hospitality, hotel, motels. Median percentage change 10.18 percent, 23 properties impact, and the commercial industrial percentage change map is included as well. Bangor region economy employment statistics show total employment in the Bangor statistical area as of June 2025 had decreased 0.3 percent since June of 2024. The level number of jobs was 74,400, or 0.3% lower than a year ago. Our region's unemployment rate in May 2025 stood 3.6%, an increase from the previous year's rate of 3%. That's an increase of 20%. Our region's May unemployment rate was higher than Maine's, Lewiston's, and Portland rates. The region around Portland, South Portland had a rate of 2.8%. The source of this information comes from the Federal Reserve of Boston. The next slide shows how taxable sales in Bangor have changed from calendar year 2023 to 2024 according to Maine Revenue Services. The general merchandise category saw the largest year-over-year increase at 5.5 percent. So here's the table that lays out each large category reported by the state. So we have the top one, which is auto transportation in Bangor 2023, just over 530 million dollars of sales in Bangor 2024, just over 550,000 in sales. That's the 3.8 percent increase. Building supply was actually down 1.3 percent. Business operating was up 2.7 percent. Food store was down 5.1 percent. General merchandise was up 5.5 percent. Other retail was down 2.6 percent, a restaurant was up 2.1 percent, and lodging was down 2.7 percent. The next slide shows that apartment buildings and other commercial industrial properties also received increases to their property values. So we have it by commercial occupancy type and the value increase. So hotel motels increased 10.2 percent, storage and distribution warehouses up 3 percent, convenience stores up 1.8 percent, Service and storage garage up 2.2%, office and medical office up 0.8%, retail and discount food store up 2.8%, restaurant and fast food up 3.8%, large multifamily apartment up 2.8%. And then if we look at the commercial industrial percentage change by area of the city, and we have the median value increase, we look at Hammond Street and Main Avenue up 2.2%, Hogan and Stillwater area up 1.8%, Broadway retail area up 1.4%, Union Street retail area up 1.1%, Odlin Road mixed area up 2.4%, Hammond area with the industrial parks up 2.7%, downtown office and retail up 1.7%, and State Street area up 2.5%. Where the adjustment is necessary and assessing standard, all municipalities shall achieve We achieved the following standard pursuant to Title 36, Section 327. The assessment ratio standard is between 70% and 110%. 100% is the optimum level. A deeper dive. There were 67 single residence properties that sold between January 1, 2025 and March 31, 2025. The sales analysis report showed a median ratio of just 87%. Without the previously outlined adjustments, this ratio study finding of 87% would have been in the high 70s. Again, the goal of making valuation adjustments is to follow the market trends, which will result in a ratio much closer to 100%. The real estate market of Bangor is still seeing a modest upward trend in prices paid for new and existing homes, as well as apartment buildings, according to MainListings.com. The median days on market over the past year has ranged from a low of 5 days to a high of 44 days. Demand is strong due to Bangor's appeal, along with good rental history. This change has happened despite the high interest rates, with the 30-year fixed rate level at 6.38%, according to Fannie Mae's website. The next few slides show homes that were constructed and finished by April 1, 2025. Included are the property's general location, building style, and likely assessed value. New 29 Deer Pond Lane home on.29 acre subdivision lot colonial assessed value $321,200 or $180 per square foot. Actually, this one sold on July 7, 2025, for $459,900. New home at 6 Lilac Avenue on a.52-acre lot. This is a ranch. Total value $316,700, or $192 per square foot, listed for sale for $575,000. New double-wide manufactured home at 65 Davis Road, assessed value, home only, $98,000, or $86 per square foot. This is an owner-occupied home. New four-unit at 420 Hancock Street, ranch style, assessed value, $462,800, or $115,700 per unit. Each unit has approximately 855 square feet, listed for sale for $1.2 million. What about the commercial industrial buildings built or remodeled in Bangor? Are they being assessed at reasonable values? The answer is yes. New retail building at 631 Hogan Road assessed value $1,083,200 or $330 per square foot. New car dealership at 688 Hogan Road increased in value by over $4.5 million or $171 per square foot. The value is for the new building only. Martell Garden Estates, a tiny home project at 1337 Hammond Street, completed the final 10 units for a grand total of 30, valued at $73,000 per dwelling unit. motel remodel at 750 Hogan Road increased in value by $860,000. Concert venue continues to grow and improve, increased in value by another $5 million. Total value now above $17 million. Change in Bangor's housing stock over the past year. Six new dwelling units were partially complete on April 1st. 78 new dwelling units have been completed. 23 older dwelling units or mobile homes were either demolished or removed. Business personal property. While we are covering commercial properties, let's discuss the requirement for businesses and leasing companies to pay a local tax based on their assets total appreciated value. The taxable property includes but is not limited to the following computers point of sale equipment copiers office furniture store fixtures signs trailers machinery manufacturing or processing equipment gambling machines or devices etc annually the assessing department provides a declaration form where each business can report their assets business personal property programs for more information on B.E.T.E., Business Equipment Tax Exemption, or B.E.T.R., Business Equipment Tax Rebate, please contact the assessing department at 992-4212. An exemption or rebate will help reduce the amount you pay in actual tax dollars. Business personal property highlight. In 2024, businesses in Bangor purchased more than $41.3 million worth of machinery, equipment,, computers, fixtures, furniture, etc. This group included 7,831 individual assets. Due to the State of Maine Betty program, $22.7 million or just over 55% of the purchases were exempted at the local level. The remaining $18.6 million or 45% was taxable. Both helped lower the city's tax rate. We welcome all questions and comments about this presentation. Please call our office at 992-4209 or stop by to see us between 8 a.m and 4 15 p.m Monday through Friday. We are located back in City Hall at 73 Harlow Street. This annual assessment update is also available on the City Assessors web page. Please read the February and June memos which are also useful in understanding this year's adjustments. www.vangormaine.gov assessing. Thank you. See you again.