Lower-End Housing Gaining In Value Quickest, Affecting Property Taxes

(KNSI) – The average value for all homes rose 21% in Stearns County this year and those assessed at around $100,000 are beating that mark handily in some cases.

Administrator Mike Williams says because the gains are faster for one segment of the property market compared to commercial office buildings or agricultural land, homeowners at the lower end of the residential housing market are bearing the brunt of new taxes.

“Property taxes, if we did not increase that for next year the residential homes at $100,000 are going to see a 12% increase in taxes, even if we don’t increase our levy. A home of 200,000 is going to see 6%. Ag land, they would have a break of about almost 5%.”

County expenses will be going up, devoted in large part to roads but also as an adjustment for historically high inflation, which is impacting government budgets as well as household ones.

Williams says it is rare to see certain segments of the real estate market becoming so detached from others to this degree.

“It is an unusual time that we’re in with only one area of the market increasing so much, now commercial and industrial would be down 12%. So you can see how that shift is glaring. With no change [in spending], commercial and industrial would have a 12% reduction and the lowest value homes would have a 12% increase.”

As home values on the lower end jump by tens of thousands of dollars in a single year, it is pulling the properties into a new bracket for the homestead exemption, which provides less of a shield.

The extra burden is leading to sticker shock for the homeowners least able to absorb it.

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