Office News

Market Values

We’ve all read the gloomy national real estate news or seen it on TV. The states of Michigan and Ohio have been hit particularly hard.

Many people have asked us the question: “Will you be lowering my value now that it has gone down?” My response is that we will, if the market shows a reduction is needed. Sales through the first three quarters of 2007 show no reduction in sales prices. In fact, the median sale price showed our assessment to be about 94% of the sale price. Yes, it is true that fewer new homes have been built, and it may take longer to sell your home, but the real truth is that the SELLING PRICES of the properties that do sell, have not gone down during the first 9 months of 2007. Real estate is an ever-changing market and we will continue to monitor the selling price of property. If the market value does take a turn and go down, assessed values will follow. We measure the assessed values against actual sales, not against market perception.

Agricultural Values

Agricultural assessed values based on soil productivity and net earning capacity. Assessed values are not tied to market value in any way, so recent increases in agricultural selling prices have had no effect on the assessed value of agricultural properties. Agricultural properties are valued by measuring five years of income and expenses to determine net agricultural income and then developing a net income per acre. These income and expense numbers do not come from individual income tax returns, but instead come from the official sources like the Farm Service Agency, Iowa State University, and Iowa Crop and Livestock Reporting Service. These county by county calculations are conducted by the Iowa Department of Revenue (IDR) and are converted into an average per acre price that must be reflected in current local assessments. In early 2007 all agricultural properties were re-assessed using a modern soil survey and CSR (Corn Suitability Ratings) to spread the required assessed amount. No adjustments were made for land use, so some parcels saw large changes in value, but the total for the county remained the same. In late 2007 the IDR finished the productivity study (for crop years 2001 through 2005) and concluded that Dubuque County farmland was assessed 15% too low. They subsequently ordered all agricultural values to be increased by that same amount. While high grain prices have had an effect on the market value of farmland, these same grain prices have also had an effect on the productivity value (as measured by net income). From the current grain market trends, there appears to be more increases in agricultural assessments on the horizon. These changes will be will be limited to state-wide growth of 4% annually by the IDR, so sharp changes in taxes can be minimized.