Detroit Lakes home sales rose 10%, most for 10% more than estimated market value in 2020
In 2020, 241 homes were sold in the Detroit Lakes compared to 217 home sales in 2019, a 10% increase. Most of those sales were also around 10% more than the estimated market value of the property, according to a city assessor report.
Home sales in 2020 rose in Detroit Lakes compared to sales from the year before, according to the city assessor's report.
There were 241 homes sold in the Detroit Lakes last year compared to 217 home sales in 2019, representing a 10% increase. A majority of the sales were for around 10% over the estimated market value of the property, according to the report.
"It does cycle," said Loren Tolkkinen, city assessor for Detroit Lakes. "Back in 2008, when the economy went south just about everywhere, we've seen property values go down."
On April 27, Tolkkinen presented his 2021 summary to members of city council during a meeting of the Board of Appeals and Equalization, an annual meeting where citizens can appeal their properties' assessed value.
After that assessment appeal meeting, Tolkkinen's report goes to the various taxing districts so they can begin setting their budgets for 2022 based on the reported home values. However, he said many factors, other than property value alone, go into whether, or not, a homeowners taxes will increase.
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"Look at it this way, let's say we doubled everybody's (property) value for this year's assessment for taxes payable next year," he said. "But let's say this fall, when all these districts go through their budgeting process, let's say no one increases their budgets from last year … so even though values doubled, their tax wouldn't increase at all."
Because an individual's property value only determines the portion that you pay, he said, and if all the properties increased at the same amount, there would be no change in anyone's taxable liability unless budgets increased, or decreased, or a change was made to property tax rates legislatively at the state level.
Most likely, he said, some values will go up, and others will go down, which will shift the tax burden slightly between existing taxpayers with every budgetary cycle. However, he also said development in an area that draws more residents to the city can help flatten out the tax burden because new taxpayers will lighten the load for existing taxpayers.
The report also detailed the average home sale price for a designated neighborhood and how the sale compared to the estimated market value.
One property on Glawe Lake, south of South Shore Drive on the southern boundary of the city, sold for $464,400 last year, 32.5% more than the estimated market value given by the assessor's office.
Four properties sold on the south shore of Little Detroit Lake sold for an average $786,700, 12.1% over the estimated market value in 2020. However, as more homes are sold in a specific area, the average price trends closer to the estimates. For example, 24 properties were sold off the lake between Washington Avenue and Frazee Street to Highway 59. Those properties sold for an average of $215,500 and 6.6% over the assessor's estimated market value
"We're so busy, it's crazy," said Lisa Jasken, owner and agent at Re/Max Lakes Region in Detroit Lakes. "I put (a listing) on North Shore Drive and it sold within 48 hours and that was over $1.4 million."
She said one of her rural-residential listings sold within hours of being on the market with multiple offers for the seller to choose from.
"I think it's excellent for our city," said Jasken. "It shows what a strong investment real estate is in the Detroit Lakes area."
The assessor's report also noted new construction projects around the city added more than $18 million in estimated home value through various added amenities for 2021, which is less than the $26 million added in 2020 and $23 million in added value in 2019.
"I've lived here my whole life and I think that is so exciting because I see the beauty in Detroit Lakes and the surrounding area," said Jasken. "I have six kids, and I've raised them all in this town and they are excited to raise their kids in this town because we still have that small town feel, but yet, we're growing and yet it still feels small town because we have that quaintness."
Additionally, there were 12 commercial property sales in Detroit Lakes in 2020. Those properties sold for 5.2% over the estimated market value on average, but individual commercial sales varied greatly. Country Inn and Suites on Highway 10 sold in January 2020 for $2.5 million, nearly $1 million more than the assessor's estimated market value. Comparatively, Murphy Oil was sold in June 2020 for $229,503, more than 20% under the estimated value of $277,000.
Tolkkinen said it's a lot harder to evaluate commercial property than residential property because there is a lot of variation with the different types of businesses and use of their properties. He said the spread between estimated values and actual sales of commercial property will always be greater than individual home sales.