Most Minot homeowners can expect notices from the city in their mailboxes soon, alerting them that their homes have increased significantly in assessed value.
State law requires the city to notify property owners if their annual assessment increases by 10 percent or more. Kevin Ternes, Minot city assessor, said owners of about 10,000 of the city's 13,000 houses will be receiving the notices, set to arrive by week's end.
"The average increase is between 12 and 14 percent for the majority of people," Ternes said. Increases would be higher if homeowners did any construction or made any improvements.
Ternes said many homeowners not receiving notices typically are those with newer homes that were more recently appraised.
The Minot Assessor's Office tracks property sales from the prior year and uses those sales to estimate the market value for all taxable property for the following year.
Based on residential and commercial sales that occurred in 2012, it appears that on average, residential properties sold for about 18 percent more than the city's assessment, and on commercial property, about 21 percent more than the city's assessment. To comply with state law, adjustments must be made to bring assessments in line with the market.
Although property taxes are based on assessed values, a broad-based increase in assessments doesn't equate to higher taxes. Overall higher assessed values will drive mill levies down if government spending remains steady. The most influential factor on taxes is the spending level of the city, county, school and park district.
Ternes said most people are seeing increases in assessment on their land rather than on their homes.
"We are finding that almost 20 percent of the value of a home sometimes 25 percent is in the value of the lot," he said, noting lot prices can range up to $100,000. "A year or two ago, we probably made adjustments in the cost of the bulding and the building replacement cost. We have caught up with that and are now trying to make adjustments on what the cost of a lot is."
That's true in the case of commercial property, too.
"We have commerical land that's selling for three to four times what it is assessed at," Ternes said.
Owners who have information, such as recent appraisals or sale prices, that indicate a market value less than the city's estimate are encouraged to call the assessor's office at 857-4150 or stop by the Minot Public Works Building at 1025-31st St. SE.
Ternes said the market prices in Minot began to level off in September last year and should that continue to hold, homeowners may not see such a large change next year.
In 2011, sale prices ran about 15 percent higher than assessed values. The result was that the average homeowner experienced about a 10 percent increase in assessed value last year to come into line. About half of properties received notices.
Higher assessments indicate a strong housing market, Ternes added.
"It's going to be good news again for the people who had to remodel and fix up their homes in the valley. I think it's good news for them to know that their homes are worth as much or more than what they put back into them," he said.