By Lori Carlson, Editor 

It’s not just about a home’s valuation. It’s about a home’s valuation compared to other homes in the area. That’s the message Scott County Assessor’s Office staff brought to residents during a public hearing on property assessments Monday.

Twenty residents spoke at the hearing Monday, with comments centered on the link between valuations, area home sales prices and taxes. The valuations are for values as of Jan. 2, 2008. The assessments will affect taxes payable in 2009.

Michael Thompson, a county assessor who does appraisals in Prior Lake, said though the Twin Cities and other areas have seen falling home prices, the county office looks at actual sales specific to Prior Lake.

“We focus on certain property types and neighborhoods within the city,” he said.

In areas where sales ratios indicated the estimated market values were too high, the assessor lowered them, and in areas where sales ratios indicated the market values were too low, the assessor raised them, Thompson said.

“Valuation and taxes are not necessarily absolutely linked,” he added. “You could see your valuation go up one year and taxes go down, and the next year you could see your valuation go down and your taxes go up.”

The key, as Councilman Warren Erickson pointed out, is how a property’s valuation compares to others nearby.

Among tools used to gauge the effectiveness and equality of assessments is price-related differential (PRD). Appraisal uniformity is considered “regressive” if high-value properties are under-appraised relative to low-value properties, Thompson said. Appraisal uniformity is considered “progressive” if low-value properties are under-appraised relative to high-value properties. The state Department of Revenue looks for a PRD of between 97 and 102; Prior Lake’s PRD is 100.39.

“We feel that the work accomplished in the past two years has greatly improved the level and equality of the assessments,” Thompson said.

Though the assessor’s office follows home market listings, it sets values based on sales, not listings, Thompson said. State law requires assessors to value property at 100 percent of market value.

The office conducted physical inspections of properties in Prior Lake between July 2007 and January 2008. The inspections included newly constructed buildings, additions and improvements of more than $1,000. There were 117 new home permits issued in 2007, and the assessors visited a total of 505 properties with new permits.

Also, per state law, an annual inspection of 20 percent of all properties was completed. About 2,076 of Prior Lake’s 10,380 parcels were part of the annual review in 2007.

The average sale price for a single-family home in Scott County in 2007 was $326,430, compared to $334,784 in 2006. The average town home sales price was $199,564, down from $212,355 in 2006.

In Prior Lake, the Multiple Listing Service (MLS) showed 245 sales of single-family detached homes in 2007, compared to 299 in 2006. The average 2007 sales price in Prior Lake was $400,077, down from $427,604 the previous year.

Prior Lake town home sales prices averaged $240,248 in 2007, compared to $249,235 in 2006. There were 101 town home sales in the city in 2007, down from 146 sales in 2006.

 Lori Carlson can be reached at (952) 345-6378 or editor@plamerican.com.