For the first time in decades, Crow Wing County assessors have lowered the estimated market values for residential property - not for pockets but for entire taxing districts.
But other homeowners may have seen an estimated market value climb or find it unchanged.
"It's still a roller coaster," said Crow Wing County Assessor Marty Schmidt.
For more details
Go online to www.co.crow-wing.mn.us or www.co.crow-wing.mn.us/assessor/index.html or call the office at 824-1010.
Crow Wing County Assessor Marty Schmidt said people with questions about their assessments are welcome to call the office or visit the office on the third floor of the historic courthouse on Laurel Street in Brainerd.
Valuations may be appealed at local Boards of Appeal and Equalization. The county Board of Equalization is 9 a.m. June 13, but people need to attend their local boards first and those dates are included in the notices mailed to property owners.
County assessors look at individual properties, at how the property is being used - such as a residence or a business - and at a 12-month sales study when determining property valuations.
The sales study looks at arms-length sales - those not involving family members or foreclosures for example.
The county looks at sales of similar properties and takes the median number. If there are 21 sales, then sale number 11 is the yardstick.
The assessor's office looks at the individual property and determines whether the assessed market value should be adjusted.
The state Department of Revenue keeps an eye on the counties' work, letting them move in a preset bracket not lower than 90 percent of the median, or middle number in a series, and not higher than 105 percent.
What happens with the spring and summer peak home sale time is expected to provide a clear sign of where the housing market is going. Property is taking longer to sell, but there are sales.
Schmidt said the most prominent drop in estimated market valuations came in Jenkins Township and in Pequot Lakes where valuations decreased by 10 to 15 percent. This is the first time since Schmidt became county assessor in 1985 that he can recall lowering assessments beyond a few isolated pockets.
"This is probably the first time that I can remember even back when we had real high interest rates that we took a taxing district and basically dropped the whole thing, not necessarily on all properties, but on residential type places," he said.
Lake property appears to be retaining its value, which Schmidt said has served as a stabilizing factor. While homeowners may welcome tax relief that may come with a dropping valuation, others may worry they are losing value in one of their chief investments - their home. That could mean they won't get out of a home what they've sunk into it.
Assessed market value is just part of determining what the property taxes will be. Government spending determines the property tax rate. Townships, cities and school districts are additional taxing districts. The estimated market value in the county assessment establishes a taxable market value. It is not to be confused with a listing price. A home listed at $300,000 may be dropped to $200,000 if it languishes on the market, but the estimated market value may still be $150,000.
And the 2009 assessment notices used to determine the taxable market value payable in 2010 are arriving in county mailboxes now. The notices are mailed in March and April.
Valuations look at a property's use, home or business for example, and use a 12-month sales study. The study typically lags behind the current housing market, which may be beneficial when a housing market is booming. For years, the assessor's office struggled to keep up with the skyrocketing valuations here.
By state law, the county is required to stay within 90 to 105 percent of the median. Schmidt said the goal is to be middle-of-the-road. The current study looks at property sales from Oct. 1, 2007 through Sept. 30, 2008.
Schmidt said the time lag often creates confusion for homeowners, which may be more acute this year given the economy. If it seems illogical to have an estimated home market value increase after the housing market collapse, pay cuts, job losses and the national economic turmoil, that sensibility isn't lost on Schmidt.
He describes the mass appraisal process established by the state as a "snapshot in time" for property value that does not reflect rapid changes either up or down.
Another part in the mix is the sunset of the limited market value provision in state law, which meant residential property (not commercial or apartments) were allowed to be valued below the estimated market value. The Legislature eliminated the limited market value and Schmidt said some properties will see an increase in their 2009 taxable market value because of the change.
To find out if the housing market is dropping here, the county will need data from actual property sales, which don't include foreclosures. With a rising number of foreclosures and their obvious effect on the market, Schmidt said that question has come up with the state.
Sheriff's certificates, which confirm a foreclosure sale took place, numbered 142 in Crow Wing County in 2006. By 2007, that number jumped to 231. In 2008, there were 356. As of the end of March, there were 86 foreclosures.
The notices of pendency, indicating a foreclosure proceeding is about to commence, numbered 273 in 2006, 427 in 2007 and 576 in 2008. As of the end of March, there were 164 notices filed in Crow Wing County.
Schmidt said he believes foreclosures should be considered at least in some percentage. He said the best avenue to tackle the questions of foreclosures and whether the law should be changed to make assessments more current with the market is with the Legislature.
RENEE RICHARDSON may be reached at email@example.com or 855-5852.
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