Sales nudge PR property values higher
Adjustments in estimated market value follow a state formula targeting a median ratio of estimated market value to actual sale prices in the 90 to 105 percent range.
Many local property values have been adjusted upward for 2020, county and city assessors told the Park Rapids Board of Appeal and Equalization on April 9.
The board, comprising members of the city council and Mayor Ryan Leckner, met via conference call due to COVID-19 social-distancing guidelines.
County assessor’s report
Hubbard County Assessor Ginger Buitenwerf explained that adjustments, represented in the valuation notice that recently went out to local taxpayers for taxes payable next year, are based on a study of qualified property sales countywide from October 2018 through September 2019.
Broken down by property type and by township or municipality, the study excludes sales whose prices could skew the average, such as sales to a relative, estate sales, foreclosure sales, sales of a partial interest in a property, etc.
According to Buitenwerf, the study compares assessed valuation to actual sale price for properties in the same district and type. The median (middle value) ratio should lie between 90 and 105 percent; if it doesn’t, the valuation of similar property in the district is adjusted according to Minnesota Department of Revenue guidelines.
Buitenwerf reported that during the study period, sales in Park Rapids included 11 commercial properties with buildings, one apartment facility and 84 recreational or residential properties (74 off water and 10 on water).
Based on preliminary sales ratios of 77.5 percent for the commercial properties and 85.4 percent for the recreational or residential properties, Buitenwerf noted, property values in Park Rapids were adjusted upward to make these ratios 92.6 percent and 91.6 percent, respectively.
City Assessor Loren Tolkkinen provided a more detailed breakdown of the property sales in Park Rapids during the October 2018-September 2019 study period.
Broken down by neighborhood, there were:
20 residential/recreational sales in the “west outer” neighborhood, resulting in an 8.5 percent increase in improved property values.
23 “west inner” neighborhood sales, leading to a 12.5 percent upward adjustment.
23 “east outer” sales, bringing a 7.5 percent increase.
Six “east inner” sales requiring no adjustment.
Six sales in the “Fishhook River north of dam” neighborhood, raising bare lot values 5 percent and improved values 3 percent.
Three sales in the annex east of County 6, raising improved values 7 percent.
Regarding commercial property values, Tolkkinen reported that land values went up 10 percent throughout the downtown area, while values on improvements went up at least 25 percent on S. Main Ave.
Commercial properties sold in the city during the study period were:
C’Mon Inn on State Hwy. 3 East, sold for $1.7 million and estimated-market-value (EMV)-to-sale price ratio of 110.5 percent.
Ferrellgas on U.S. Hwy. 71 South for $169,000 (59.5 percent).
On Main Ave. S., Aunt Belle’s for $255,000 (58.8 percent), Coldwell Banker Clack & Dennis Real Estate for $500,000 (95.5 percent), Albrecht Jewelers for $192,500 (92.6 percent), RiverBend Home Expressions for $161,500 (90.7 percent) and Ben Franklin for $253,000 (121.4 percent), all for a median sales ratio of 92.6 percent.
Elsewhere in the downtown area, the old Park Rapids Eye Clinic for $235,000 (84.9 percent), Affinity Realty for $106,000 (101.3 percent), Headwaters Chiropractic for $130,000 (70.1 percent) and the Intensive Hair Unit for $125,000 (99.8 percent), all for a median ratio of 92.4 percent.
The Park Avenue Apartments also sold during the study period for $1,394,900. With a 2020 EMV of $1,296,600, this had a sales ratio of 93 percent.