Worried Delaware Valley residents looking for something that’s impervious to the impacts of the deadly COVID-19 may have found it: Their property values.
Accordng to DataUSA, the median property value in Delaware County rose 3.72 percent in 2018. Zillow’s more real-time reporting shows a median price of $243,000, a 2.3 percent increase in the past year.
As the economic lockdown has wrecked havoc with so much of the region’s economy, property values in Chester and Delaware counties continue to rise, and nothing appears to be able to stop them. Not Gov. Wolf’s aggressive restrictions on business, not uncertainty about schools reopening, and not — despite predictions from its opponents — the Mariner East 2 pipeline project.
For years, Mariner East 2 pipeline opponent Eric Friedman has warned that the project would drive property values in Delaware County straight down. Last year, he testified before the state legislature that the pipeline was a direct threat to home values in nearby neighborhoods like his, predicting “losses to the tax base” of the county. Friedman, who heads the Andover Homeowners Association in Thornbury Township, suggested the total cost of the energy infrastructure projects could be in the hundreds of millions, including lost property values.
Today, Friedman is scheduled to appear before the Delaware County Board of Assessment Appeals, complaining that his property values are too high.
“Unless you take into account the stigma and the price impairment caused by the pipeline then you’re not reflecting fair market value,” Friedman says.
However, Delaware County assessment manager John Van Zelst says the rising valuations near Mariner East 2 are based on the most important metric that can be used: the free market.
“The biggest measuring tool that we would have would be the market,” Van Zelst told Delaware Valley Journal. “If the pipeline is having a negative effect in certain neighborhoods, you would see that with the transactions that were taking place in the market.”
“Since the market approach is one of the approaches to doing this whole evaluation, I feel comfortable that it’s being looked at,” he added. “If the houses have a negative impact that they can only get $300,000 now because of what’s going on, that’s going to show in the market.”
BrightMLS’s June report showed pending sales in both Chester and Delaware counties up around 30 percent year-to-year. And Zillow rates the market in Friedman’s zip code as “very hot.”
The issue of property assessments is hot in Delaware County as well as the county releases new property valuations ordered by a judge in 2017 that go into effect at the beginning of 2021.
All data for the evaluations was collected in July of 2019. The county contracted with the company Tyler Technologies to work on the “re-val,” and the new assessments were mailed to homeowners at the beginning of this July.
Appeals on the new evaluations can be filed through September 1 of this year, according to a county website. Hearings on appeals will begin in August and run into part of November.
Informal appeals have already taken place.
“They [Tyler Technologies] would be considering any appeal information someone brought in to them as important information, and they would review it to see how much weight to apply to the situation,” Van Zelst noted.
Van Zelst says the assessor’s office is doing everything they can to offer virtual hearings throughout the entire timeline for those that do not want to meet in person because of the coronavirus.
The coronavirus could have an impact on property prices much further down the road says Stuart Weintraub, a long-time property tax attorney in the Delaware Valley.
“I’ve heard that residential owners of properties may be fleeing the city to get to the suburbs as a result of the pandemic, which could have the effect of driving prices up, driving up the value of homes in the suburbs,” Weintraub told Delaware Valley Journal.
But Van Zelst pointed out any impacts the virus might have on evaluations won’t be seen in the ones property owners have right now.
“The evaluation is based on a July, 2019 valuation. COVID did not happen then, so no one really knows what kind of impact it may or may not have. But this year, for appealing purposes, it really doesn’t play any role because it’s too early to know one way or the other.”
The coronavirus could have another impact on future residential property values if, as some economic analysts predict, it sends more businesses and workers into the suburbs — just in time for the Millennials to begin their house hunting.
“The Millennials are the largest generation in the U.S. economy. There were approximately 72 million people born between 1981 and 1996 and they are growing up,” says Ken McCarthy, Americas Head of Applied Research, Cushman & Wakefield. “They’re turning from 20 somethings into 30 and even, dare we say it, 40 somethings (the oldest millennials will turn 40 next year). They are now at a stage in their lives where they are forming families and, like the generations before them, they are looking to the suburbs for more space, better schools and a better quality of life.”
These demographic trends are likely to have far more impact on property values in Delaware County than any virus or pipeline.