Cheltenham: Why are values not keeping up?

Cheltenham SealThe economy appears to be improving.  We had a strong Spring/Summer selling season in the Philadelphia region and indicators point toward a pretty “normal” Fall selling season.  Then, why aren’t Cheltenham’s home values keeping up with areas like Abington, Springfield and Upper Dublin?

Well, Cheltenham represents a classic case of where local taxation and zoning policies can actually handicap a community’s property values.  However, in order to fully understand the implication of the township’s tax situation, it’s also important to understand what the township has to offer. When fully put on the table and compared to competing local townships, the existing tax structure becomes even more burdensome to the potential buyer or seller.

As a whole, Cheltenham town has a lot going for it.  It’s a desirable community, safe, clean, and great for raising a family.  It has easy access to employment centers in Philadelphia and the surrounding suburbs.  The housing stock is varied and appealing.  It has an “average” school system that has continued to sustain itself for generations, although it’s not quite what it used to be.   There are also community groups, parks, as well as arts and crafts and extracurricular events regularly scheduled.

Unfortunately, despite all the above, Cheltenham levies the majority of its tax base onto residential property owners.  Compared to neighboring communities like Abington, Upper Dublin and Springfield, Cheltenham has very few commercial usages that contribute to the tax base.  This issue dates back to when Cheltenham was being developed and the zoning code was created.  The zoning code that was put in place at that time did not adequately allow for the future expansion of commercial and industrial properties in the area.  As a result those entities were attracted to other neighboring townships, along with their tax dollars.  With only limited commercial, industrial and institutional usages the majority of the tax burden has been placed upon the residential properties. (Remember, Cheltenham was once the preferred address of many local industrial-era elite.  Which, in part, laid the groundwork for an underdeveloped non-residential tax base.)

How does this affect home values?  Well, look at it this way.  Let’s say we are looking to buy a 3 bedroom, detached home in the area for $250,000-$255,000.  Here’s how the houses and taxes would stack up.

Abington               $252,500               Taxes     $3,906 – $4,586

Springfield            $252,250               Taxes     $4,334 – $5,142

Upper Dublin       $253,650               Taxes     $4,604 – $5,216

Cheltenham        $251,250             Taxes    $6,680 – $8,044

As you can see, for roughly the same price, a house purchased in Cheltenham can, in some cases, nearly double a buyer’s tax burden.   It’s at that point that a buyer has to ask himself, “Why would I live in Cheltenham and be subject to the high taxes when I can buy a similar house in a neighboring township and pay much less?”  This is the very question that is keeping housing prices down in Cheltenham.  

The answer to the question for many buyers is to simply not consider buying in Cheltenham.  With fewer buyers seeking houses in the township, the housing inventory increases.  When inventory increases, values will drop accordingly.  This is why the collapse of the housing market affected Cheltenham more deeply than surrounding communities.  It continues to hurt Cheltenham because while values were dropping, taxes were not.  In fact, they were increasing. 

The answer is not an easy one.  The zoning and tax situation in Cheltenham combined with other factors such as an aging demographic, “average” schools and increased municipal spending have come together to form a perfect storm over the township.  Values in Cheltenham will continue to lag behind competing townships until something is done about the residential tax burden and municipal spending.

If there is a certain market or neighborhood that you would like to see discussed on PAB, just click on the “Ask PAB” link above and send your suggestion.  For more information please visit our website at  For assistance with appraisals pertaining to Estates, Bankruptcy, Divorce or Tax Appeal please contact The Coyle Group at 215.836.5500 or


Bucks County Raises Taxes

December 22, 2011:  In an article posted today on the  website, Staff Writer, Gary Weckselblatt, writes about the decision of the Bucks County Commissioners to increase taxes by 5.7%.  In return, the county plans to spend slightly less in the new year than it did in 2010.

The increase is the first in six years.  The county spending plan of $461.8 million will be funded by upping the county millage rate to 1.258.  Also, implemented will be a hiring freeze and potential staff reductions.

While the increase is not as drastic as those implemented in neighboring counties, it will cause some residents to seek relief.  Given that property values in Bucks County are stable at best (declining in some areas), many property owners will likely turn to appealing their property tax assessments as a way to stave off the increases and, perhaps, lower their tax burden.

The Up Side…this is a good time for property owners to explore assessment reduction.  Reducing your assessment will effectively reduce your tax burden. 

When appealing your assessment it is imperative to have the best sales data available, to support your case.  Having an appraisal of your property completed by a State Certified Real Estate Appraiser to submit with your appeal will give property owners the best chances of winning a reduction. 

Property owners may also want to hire a tax assessment reduction firm to represent their appeal.  There are many firms that specialize in assessment appeals as well as a number of attorneys that make it part of their overall practice.  Typically, they will take care of filing the appeal and will represent you at the hearing.  They will usually work on a contingency basis, meaning they will not receive a fee unless you get a reduction.  Their fees are usually a percentage of the reduction.  When looking for someone to represent you, be sure that they have experience with tax appeals and that they have a proven record of success in front of your particular Board of Assessment.  All the Boards are different and knowing that your representative has had success in front of your Board will only make your case stronger.

To read the full article, visit the following link.  Bucks Spends Less, You Pay More

If you have any questions about tax assessment appeal or property value , please feel free to call or email The Coyle Group at 215.836.5500 or 


Assessment Appeals 101

Spring only officially began less than a week ago but, it’s not too early to start thinking about appealing your tax assessment.  Sure, you might think “the deadline for filing an appeal is still months away”…”there is plenty of time to work on the appeal in the Summer”…”geez, it’s not even Memorial Day, why worry about an appeal now?”  

Well, you would be surpized at how many people do begin thinking about their property tax appeal this early in the game.  It ususally occurs to folks when they receive their real estate tax bill in January and February. 

It’s this time of year that we receive hundreds of phone calls and emails from property owners who what to know if appealing their assessment is feasible.  One thing we’ve noticed is that many property owners have a fundamental misconception about their property taxes and how to go about appealing them. Most people think that they can appeal their taxes. Unfortunately, we can’t appeal our taxes. Sorry, folks, no such luck.

However, it is your right as a property owner to appeal your assessment. Your assessment is the underlying factor upon which your taxes are calculated. Given that most properties are taxed on an “ad valorem” basis, meaning the tax is based on the value of the real estate, your assessment should represent the current fair market value of your property.

Now, most counties in the Philadelphia metro region (including Montgomery, Bucks, Delaware, Chester, Berks, Lehigh & Northampton) have not been reassessed in years (it’s very costly to do a countywide reassessment). What this means is that the assessments may present an inaccurate representation of current fair market value. Now, as a means of trying to keep the assessments current with the real estate market, equalization rations have been developed in an attempt to make the assessments echo the current market. These ratios don’t always succeed in reflecting the market, especially the turbulent markets of the past 3-4 years. As a result, the assessment of a given property may be over stated, which translates into taxes that may also be overstated.

So, it stands to reason, if real estate values are declining your assessment should mirror those declines…right? This is done by filing a tax assessment appeal with your county board of assessment. Along with filing the necessary appeal paperwork, it is your responsibility to demonstrate that the assessment does not reflect the current fair market value of your property. The best way to do this is to present an appraisal report to the board at the time of your hearing.

Appraisals should be completed by a state certified appraiser (or licensed appraiser depending on the state) who is familiar with your area. In Pennsylvania, for instance, only a certified appraiser can provide an appraisal of your property. Anything completed by someone other than an state certified appraiser is not an appraisal.  Real estate agents and brokers cannot provide appraisals in Pennsylvania.

The deadlines for filing a tax appeal are usually in Bucks, Delaware and Chester Counties August 1, 2010 and September 1, 2010 for Montgomery County.  If you reside in any other Pennsylvania counties, please check with your county tax assessor’s office to confirm your county’s deadline. Remember, if you miss the deadline, you miss the opportunity to appeal and will have to wait another year (paying the same high taxes).

For more information or to see if you are a candidate for tax assessment appeal, please contact The Coyle Group. 

Note:  Be sure to visit our site from time to time over the next few months as we present a series of posts that relate to Tax Assessment Appeals and property tax reduction.

The Coyle Group provides appraisals for tax assessment appeals in Montgomery, Bucks, Delaware, Chester, Lehigh, Berks and Northampton Counties.  Call us at 215.836.5500 for more information.