The continuation of lower mortgage interest rates and fewer homes for sale on the market means properties are going for above-asking value, leading to higher mortgage tax distribution in the county.
Add that to people refinancing their homes for various reasons and the county has seen an increase in the mortgage tax it collected for the period of October 1, 2020 to March 31, 2021 compared to the same time period for 2019 to 2020.
The increase means a larger distribution to municipalities in the county, which the Legislature voted 13-0 to distribute Tuesday evening during its monthly meeting. Legislators Brian McGarry and Cathy Gatta were not present at the vote.
No legislators commented on the distribution.
The county will distribute over $2.3 million to eight municipalities for the period of October 1, 2020 to March 31, 2021. That is an almost 71% increase from the previous time frame the year before when the county distributed over $1.3 million among the eight municipalities.
For every home that is bought or refinanced in Schenectady, a 1.25% mortgage recording fee is applied, said Erin Roberts, the director of public communications for the county. Of the 1.25%, the municipalities in the county get 0.50%, the county gets 0.25%, the Capital District Transportation Authority receives 0.25% and 0.25% to the State of New York Mortgage Agency.
“I’ve never seen a market like this in the 37 years I’ve been doing this,” said Timothy Egan, the owner of Egan Appraisals.
He said the mortgage tax rates are at historic lows and with not as many homes on the market as buyers, people are paying more to get the home they want.
He said his own son put in above asking price offers on multiple properties in the region.
“It’s crazy,” he said.
In some areas he has seen people pay up to $20,000 over asking price, he said. Some potential home buyers have been marketing themselves to sellers by writing them letters explaining who they or their families are and why they are looking to purchase the home, Egan said.
On top of homes selling for more they’re flying off the market. Egan said homes would normally be on the market for 30 to 40 days or as many as 120 days but aren’t staying on the market for more than three weeks.
Egan said there are so many people looking to buy homes he has actually gotten letters in his mailbox of people asking him to contact them when he’s ready to sell his home.
“I’m not the only one, I’ve heard that from others,” he said.
Roberts said homeowners are also taking advantage of the market by refinancing their mortgages.
“In some refinancing instances, homeowners are taking out mortgages that are higher than existing mortgages for reinvestment purposes – additions, upgrades, pools, hot tubs, energy efficiency projects, etc.,” she said in an email.
The latest wave of people refinancing their mortgages began in the middle of 2020, said Bob Leonard, the vice president of TrustCo Bank.
Since then, he said it has tapered off, but he’s still seeing more people refinance than in years past.
“It was just a great opportunity,” he said.
What each municipality gets:
- Village of Delanson- $3,449
- Duanesburg- $122,904
- Village of Scotia- $50,884
- Glenville- $521,646
- Niskayuna- $511,870
- Princetown- $54,106
- Rotterdam- $579,028
- City of Schenectady- $458,965