Home prices keep city assessed values rising
Home prices jumped 27 percent on average in Minot last year, according to the city assessor’s office.
The median sale price of $239,000 on homes not in the flood area compared with a median sale price of $188,000 in 2011.
Those strong market figures mean assessed values also must go up to stay in compliance with state law, city assessor Kevin Ternes told the Minot City Council, which met Tuesday as the Board of Equalization. The board approved assessed valuations for the city, but final determination of assessments will be made by the State Board of Equalization.
Owners of about 10,000 of the city’s 13,000 houses received notices in March that their assessments would rise 10 percent or more. The average increase citywide is 13 percent.
Several home and business owners appeared at Tuesday’s meeting to present information and request changes in their assessments. Some questions over assessments have come from valley property owners, who are seeing values greater than pre-flood.
“If you fixed up a home in the valley and it is ready to go or close, it is worth a lot more than last year,” Ternes said.
City records show about 166 flooded homes sold after they were repaired. The median assessment of these homes before the flood was $141,000. The 2012 median sale price was $182,000, or about 30 percent more.
“We did determine that the median sale price in the valley is 10 to 20 percent less than what was selling on the hill. That is recognized in our numbers,” Ternes said.
In doing sales studies, repaired homes in the valley are assessed based on comparable home sales. They are not compared with sale prices of homes outside the flood zone or prices of replacement homes in the flood zone, he said.
Bob Timm, a resident of southeast Minot who reported a 40 percent increase in his assessment, said lack of disclosure about rehabbed homes in his once flooded neighborhood prompted buyers to pay more than they should. Contractors who repaired and marketed homes never lived there and aren’t telling buyers that the neighborhood has been plagued by sewer backups and resulting mold for a number of years, he said.
Referring to one newly enlightened buyer, Timm noted, “They said they never would have bought the house, no matter what price it was at. I think that needs to be taken into account. A lot of these houses that have been flipped, that were sold privately, the unsuspecting owners had no idea the problems that went with that house.”
Mike Stenvold, who owns rental property, suggested to the board that assessment increases in the valley be phased in over a period of years to enable people to recover what they have invested in rebuilding. In setting rent, he anticipated some increase in assessment but not the huge jump that he received.
“It is hard to go back to my renters now and say, ‘I need to increase your rent,'” he said.
Joe Klein, whose muffler shop flooded a month after he bought it, told the board that flood damage never resulted in a discount on his property assessment, which has almost doubled since 2011.
Ternes said commercial property in general in Minot has been assessed 21 percent below what properties are selling for, which forces an increase in assessments.
Renovating a flooded property also creates improvements that increase the property’s pre-flood worth, he said. That, along with housing demand, is increasing the value of properties in the flooded area, he said.
Ternes added that assessments, although used in calculating taxes, don’t determine whether taxes rise or fall.
“Taxes are the result of government budgets, not assessments,” he said.