Dickinson home, business assessed values leap after latest estimates
In real estate, there is a common saying based on the importance of "location, location, location" when assessing market value.
Apparently, the location people are talking about is Dickinson.
The city on Friday sent out letters outlining new yearly assessment numbers for owners of homes and business properties, sending some into near-panic mode.
Overall, homes in Dickinson have been assessed on average 26 percent higher than a year ago while commercial real estate went up a whopping 42 percent.
"This year, the market indicated that just about all the properties had to have an increase," Dickinson City Assessor Joe Hirschfeld said. "With the parameters we have to follow, we need to have 30 sales (every year) to come up with our numbers. If we don't get 30 from the current year, we can go back three years. Since we were using outdated sales to get some of those numbers, we weren't able to allow for some of the increases you see now -- it kind of slingshotted those values forward."
Hirschfeld said that while commercial sales have lagged, there were 375 residential sales in 2012, allowing the housing numbers to be tighter.
Dickinson resident Janelle Carlson said the value of her home on Second Avenue West has tripled from just over $100,000 in 2004 to well over $300,000 today.
"The value of my home went up $69,000 from last year to this year," Carlson said. "As our expenses continue to increase due to the oil boom, it is making it increasingly difficult to move forward wholeheartedly committed to raising a family in this community. With the equity I have in my home, it makes more sense financially for us to move. I have a really hard time believing my house is worth $331,500 with its peeling paint and the repairs needed."
Hirschfeld said he fielded a number of calls from city residents on Monday, but said added property value doesn't necessarily mean higher taxes.
"Historically, we had a larger-than-typical adjustment percentage this year," Hirschfeld said. "Valuations, although utilized for taxes, don't really have to do with taxes. Valuations are to help the mill rate and the budgets interact. For those concerned about their taxes, they need to be speaking to city commissioners, county commissioners and school districts about their budgets and making sure those budgets stay under control. An increase in values does not always mean an increase in taxes."
Carlson said people will be forced to move out of Dickinson if their cost of living continues to rise.
"This community cannot afford to continue losing strong, dedicated citizens," Carlson said. "I fear that many, like myself, will begin to see the decision to stay as financially irresponsible. I would like to hear an explanation as to why the dramatic increase again this year and what they plan on doing in the future."
Dickinson City Administrator Shawn Kessel said the municipality is simply following the formula required by state law when appraising real estate.
"The mass appraisal system we use requires us to reflect market conditions within a very specific set of parameters," Kessel said. "We must have all properties valued at least within 90 to 100 percent of current market values."
Fueled by the Bakken oil play, those market values have been reaching for the sky in recent years, something that Kessel said isn't a bad problem to have in many ways.
"An increase in property values is a sign of good economic times," he said. "The national economy, as it relates to housing markets, is just starting to recover after several years of decreasing property values. The city of Dickinson has been largely insulated from national trends and enjoys a robust economy."
Citing the city's recently approved comprehensive plan -- designed to take the city to 2035 -- Kessel said property owners in Dickinson should expect continued increases.
"Our comprehensive plan predicts a population gain over the next several years," Kessel said. "That should translate into rising property values for an extended period as long as economic conditions remain positive."
For Carlson, the thought of more increases is daunting.
"I expect my property taxes to be almost $4,000 per year now," she said. "I don't want to see my house payment go up again. It is solely my strong and meaningful connections at my workplace, ABLE, Inc., that are keeping me here."