Strong local real estate market expected to affect valuations

Updated: Oct 6, 2021

MOUND CITY – One of the unexpected results over the past year and a half of the COVID-19 pandemic has been the dramatic increase in prices of real estate – both houses and land – over the past year. And while a hot market in some neighborhoods in the metropolitan area predated the pandemic, this time trend has made it to Linn County.

Long-time real estate broker Larry Holt has witnessed past waves of interest in Linn County property in the past only to watch it wane when gas prices increased or unemployment rates cause the market to stagnate.

But over the last year, accounts of home-sellers tacking on tens of thousands of dollars to what formerly was a modest price have become commonplace. So are stories of bidders going to unusual lengths to nail down a home they want.

And some buyers are tendering bids on houses they haven’t personally inspected.

“Anything we’ve had is selling in the first 20 days,” said Holt, who manages the Mound City office of Crown Realty.

The market for houses in Linn County has been hot, Holt said. “Houses that were selling for $80,000 to $100,000 are now selling for $140,000 to $170,000.”

“That’s the biggest jump in 40-some years,” he said. He added that the market was equally brisk in areas around Linn County, including Bourbon and Anderson counties.

With building costs up 35 percent or more, homes that are already built are even more attractive. And of course, higher sales prices mean more commissions for real estate agents.

“We’re all looking for homes to sell,” Holt said. “We’ve had an influx of people moving in.”

Residents who are new to the area are coming from all over the United States, but Holt said he’s had several buyers from Colorado recently.

So what’s the draw? “We’re not hidden anymore,” he said. He added that the attributes that keep Linn County residents here – beautiful scenery, friendly people, good schools – are a magnet for home buyers.

However, it isn’t just homes. All types of ground – farm ground, recreational ground and pasture – is selling for higher prices as well, he said.

The increase in prices is obviously good for sellers, but for buyers like seniors looking to downsize and other people with limited income, higher prices are yet another obstacle to homeownership.

But another problem could be looming for homeowners as well: higher property valuations. However, that doesn’t necessarily mean higher taxes, at least not this year.

The Linn County Appraiser’s office collects information about each property sale and looks at each of the approximate 19,000 parcels in the county to update valuation annually, according to Linn County Appraiser Kathy Bridges.

State law requires that once every six years, appraisal staff physically visit and inspect the exterior of each property to note any improvements or other changes.

Any changes in valuation for 2021 have already been made, and notices were sent out to homeowners in the spring of this year. Bridges said that values went up an average of 8 percent overall and 11 percent on residences.

By the beginning of June, the appraiser’s office certifies valuations to the county clerk’s office, and those go into calculating the county’s budget for 2022, which was approved last week.

Bridges said that to figure values for 2021, her staff used three previous years of sales as the basis – 2018, 2019 and 2020. And the staff uses comparable values and costs to determine what valuation a property will receive.

“That doesn’t mean every parcel will go up,” she said.

And if the valuation did go up, it doesn’t necessarily mean that taxes will be higher.

“If the value goes up across the board, the mill levy would come down,” said County Clerk David Lamb. This year under the revenue-neutral budget dictated by the Kansas Legislature, the county mill levy decreased by more than 2 mills, and other local government budgets were equally affected.

Because of the state-imposed limit, taxes shouldn’t increase dramatically this year, Lamb said.

However, he said that next year taxpayers could see increases.

A mill is $1 of tax for every $1,000 of assessed property valuation. Kansas has a statewide assessment percentage of 11.5 percent, so a house with an appraised market value of $100,000 would have a tax assessment value of $11,500. If the tax rate on that residence is one mill, the tax levied would be $11.50.

The county's general fund tax levy for 2022 is about 47.7 mills, down from approximately 49.8 mills for 2021. Also included in tax bills are school districts, cemetery districts, library districts, townships and other entities.

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