Essex County communities see $1B spike in property values

New and existing home values increased 12% in 2022 in Essex and Hamilton counties

By Tim Rowland

Perhaps illustrative of the parkwide housing costs, property values in Essex County — the eastern heart of the Adirondacks — total nearly $1 billion more today than a year ago. And while the number in itself has little practical bearing, it reinforces an emerging storyline of an Adirondack Park that is becoming more of an exclusive retreat for the wealthy, but also friendlier to an invigorated population able to enjoy an outdoor lifestyle while earning income sitting at their home computer.

The figure, referred to in the county’s 2023 budget documents, represents the total worth of taxable residences and businesses, an increase reflective of both new construction and homes that have soared in value.

These assessments were $930 million higher in 2022 than in 2021, which County Manager Dan Palmer said represented an increase of more than 12%. In a typical year, Palmer said, values might creep up by a percentage point or two, and in some years they are flat.

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Numbers were similar in Hamilton County, the other county located entirely within the Blue Line. Adjusted assessed values were up about 10-12% as well, or about $400 million, far in excess of a typical year, said Real Property Director Barry Baker.

“We are primarily a recreational waterfront market now and experience the same trends here as Lake Placid, though on a smaller scale,” Baker said.

“Prior to COVID, the demand for waterfront properties on our larger lakes was very strong for second home and retiree buyers. In the past couple of years, anything on the market sells.” 

— Real Property Director Barry Baker

The higher property assessments do not necessarily lead to higher taxes or represent a windfall to local treasuries, because as assessments go up, the tax rate goes down. For example, Jay Councilman Knut Sauer said assessments were up 17% in his town, so property owners would only see a higher tax bill if their own personal valuation increased by more than that percentage.

Assessors, who are pressed by the state to keep assessments as close to 100% of market value as possible, have been scrambling to keep up. Revaluations, or “re-vals,” have to be done more frequently if the price of real estate continues to rise precipitously.

That all began at the onset of the pandemic, as well-heeled people fleeing urban population areas drove up the cost of housing, often making cash offers and encountering fierce competition. Correspondingly, those with traditional Adirondack incomes relying on traditional mortgages have been squeezed out of the market.

“We saw bidding wars and properties purchased sight unseen, many to be rehabbed quickly and thrown on the short-term rental market,” Baker said.  “Similarly, our lower income and entry level buyers, which include our entry level and service industry employment staff, are totally priced out of ownership, and many out of rentals. All of this exacerbates the lack of workers.”   

Essex County’s value has also been bolstered by new construction as well, said Dave Wainwright, Essex County’s director of real property. “Everybody wants to be in the Adirondacks,” he said. “You can’t go down the road without seeing a new driveway going in.”

Some of the recent growth is commercial, such as the Saranac Waterfront Lodge, a new hotel, restaurant and event center, but most is residential — people looking to cash in on the strong, short-term rental market or build a dream home in the mountains.

Broadband has also changed the equation, Wainwright said. While coming in fits and starts, the state’s determination to bring high speed internet to the mountains has been an overall success that — fueled by the pandemic — has opened the door to younger people with high-paying jobs who are able to work remotely.

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And for the wealthy, the Adirondacks has become dream home territory. At the December meeting of the Ausable River Valley Business Association, Paul Mintz, a professional sales representative for Ward Lumber, a regional hardware and building supply store, said the new homes under construction today are often massive, which are more profitable for builders than modest workforce housing. “No one is building 1,500 to 2,000 square foot homes anymore,” he said.

This has been a common refrain among town supervisors, who worry about the lack of affordable housing, and have formed a committee to study the issue. Wainwright said housing has been expensive and hard to find in the trendy villages of Lake Placid and Saranac Lake, but the market is now getting tighter and pricier in the neighboring towns of Keene, Wilmington and Jay.

The market seems likely to cool at some point, but there’s no sign that values are coming down. Instead double-digit increases are predicted. “Unfortunately, this is the new standard,” Wainwright said. “The (projected) market trends from the state are 10 to 14%, with some as high as 18.”

No matter that sellers have significantly upped their prices, they are still getting 96% of what they’re asking, he said.

Even as supply prices spiked during COVID-19 and interest rates have been rising, Jay Ward, Ward Lumber CEO, said the construction market remains strong — and probably could be stronger were it not for an acute lack of homebuilders. “It’s very difficult to find qualified trade people,” he said.

Some who are moving up from more populated areas have to effectively bring their own construction crew with them. “The vast majority are coming from outside the area and building larger houses,” Ward said. “(Construction) reflects the real estate market; people want to live here.”