Living large on the lake: Recession tempers home values, but still plenty of million-dollar lake properties in area
Part 1 of 2: While the F-M area may have 23 homes valued at over $1 million, Minnesota's Lakes Country has well over 80, with some topping $2 million. Today and tomorrow we look at the market for high-value lake homes and those who live in them.
DETROIT LAKES, Minn. - For most of the past decade, the story of lakeshore prices in western Minnesota was one of steadily rising values.
"That's when it really started to explode," said Becker County Assessor Steve Skoog, recalling the boom years.
Then, the recession came.
Prices for homes on premier lakes flattened out, while prices for homes on second-tier lakes and even some spots on very popular lakes such as Lake Melissa near Detroit Lakes stumbled, Skoog said.
"This last year, we actually reduced residential and seasonal values. I think countywide we went down about 10 percent," Skoog said.
Still, high-value lake homes remain plentiful.
Public records show that nearly 30 lakeshore properties in Becker County and nearly 60 in Otter Tail County are valued at $1 million or more, based on the assessed value of both the structures and the land they sit on.
That compares to 23 homes in Cass County, N.D., valued at $1 million or more, with 18 of those homes in the city of Fargo.
There are no home properties valued at $1 million or more in Moorhead or Clay County.
The most expensive home property in Fargo has an assessed value of about $1.8 million.
Otter Tail County has at least six lake home properties with assessed values of more than $2 million.
When it comes to lake homes, the value of the land the home is built on often far outweighs what the structure is worth, which is the reverse of high-end properties in the city of Fargo.
Exceptions include three homes on Pelican Lake in Otter Tail County owned by Azure Estate LLC, a company associated with John Barry, who began a high-profile building project on the lake in the late 1990s.
One of the three properties is valued by the county at about $5.5 million, with the building's value reflecting about $3.5 million of the total.
Another Barry property is valued at about $1.3 million, with about $855,000 of that associated with the house.
A third property is valued at $1.1 million, with about $975,000 attributable to the house.
The Barry properties are classified as seasonal, as are many of the million-dollar properties in Otter Tail and Becker counties.
The priciest of Barry's properties on Pelican Lake carries an annual tax bill of more than $45,000.
In general, lake homes in Otter Tail County with assessed values of around $1 million carry annual property taxes of about $6,000 to $8,000.
Buyers are still paying very good prices for property on premier lakes such as Pelican Lake, said Otter Tail County Assessor Doug Walvatne, but elsewhere values have cooled from the superheated years of the past decade.
"We reduced values on Lizzie this year based on the market," he said.
Countywide, the number of home sales is down about 100 from what it was a year ago.
Walvatne also said he is seeing more sales where the price of a home is less than its assessed market value.
"It's a very good indicator the market has definitely slowed down; we're seeing values come down," he said.
"If that trend continues," he added, "we could see some (valuation) reductions on both our residential and possibly on our lakes."
The picture is similar in Becker County, Skoog said.
"Probably the biggest thing I've noticed is the lack of sales. The churning out there slowed down a lot," he said.