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Lagging real estate sales hurt bottom line in Washington Co.; Greene Co. looks steady
Staff writer
The recession and the housing slump are eating into revenue from recording fees and real estate transfer taxes Washington County collects on property transactions.
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The shortfall could be in the neighborhood of $350,000. Metcalfe said he had projected $1.2 million from total revenues, not just deeds, but if the trends of the first six months of the year continue, the revenue would be about $850,000.
Year after year, March is usually the slowest month for recording deeds, reflecting the slowness of the winter real estate market before business traditionally revs up in the spring. The doldrums, however, began earlier, and they can't be attributed to bad weather alone.
"This didn't just start in January, our slack-off," said Recorder of Deeds Debbie Bardella. "This started last year."
She pinpointed recordings in November 2008 as being down almost a thousand documents, pointing out that the number of deeds recorded has to do with not only home sales but also refinancing and the recording of gas and oil well leases.
"We would be doing a lot less recordings if we didn't have the oil and gas," Bardella said. "It fills in the gap of what we've lost in basic deed and mortgage transactions.
"The number of transactions are there, but the revenue is not there because of the fee structure."
Some fees related to mortgage and deed transactions do not apply to the recording of oil and gas leases.
Bardella said of the recorder's office, "As just an office, we are one of the more revenue-producing offices of the county. It depends on the market. I can't manipulate those numbers. This is just the downside of the present economic condition."
In late March, Bardella noticed the recording of oil and gas leases slowing down.
"They'll clear up these leases before they go out and get more," she said of the energy companies.
Greene County hasn't seen a decline in revenue from real estate transfer taxes as a result of the recession, said Greene County Register and Recorder Tom Headlee.
That's because properties have continued to sell, he said.
"Most of it has been the coal companies," Headlee said. "That's recession-proof."
Headlee said he expected July income from real estate transfer taxes will be "way up" for the month.
Not all of that can be attributed to coal, Headlee said. Part of the jump has resulted from an increase in real estate sales in general, he said.
That, too, might be linked to energy. Headlee speculated that some people have begun to purchase real estate from income they are receiving from leasing their natural gas rights to drilling companies. A lot of drilling is being done in Greene County, he said.
In Washington County, any revenue shortfall troubles Metcalfe, who monitors spending and revenue throughout the year, always with next year's budget in mind.
"I'm still a little optimistic that things will turn around before the end of the year, but the numbers so far aren't very encouraging," he said.
Coupled with the deed transfer dip are the county's significantly reduced interest rates from investments.
"Everything's less than 2 percent," Metcalfe said.
Interest on the county's general fund, earned through the Pennsylvania Local Government Investment Trust, reached $902,000 in 2007, but it's expected to plummet to $200,000 this year, less than half of what the county earned in 2008.
Shrinking home prices translate to smaller amounts of realty transfer taxes for the county, municipalities and school districts that impose them.
The county and municipalities collect realty transfer taxes of 1 percent (except for Peters Township, which collects 1.5 percent). School districts, excluding Avella Area, also collect a 1 percent realty transfer.
"They're all feeling this," Bardella said.
Washington County isn't alone in this respect.
"Dropping prices and 12 negative quarters in the last 14 define the condition of today's market, the slowest in at least 20 years," wrote Daniel Murrer, vice president of RealSTATs, a Pittsburgh real estate analysis company, in a recent news release.
Real Estate : 8/2/2009
Forget about it, who would want to buy any land around here. Between the thought of having a gas well in your backyard, or having your home, land, and water damaged by longwall coal mining there is no place to buy land. PA has totally screwed itself and our tax revenues will be hitting bottom because of these businesses.
