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HomeMy WebLinkAboutCity Council Packet 04-27-1999 BOECITY OF PLYMOUTH AGENDA 1999 BOARD OF REVIEW APRIL 27, 1999 7:00 PM Plymouth City Council Chambers I. •• City Assessor's Report 2. Public Comment MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MINNESOTA 55447 DATE: April 22, 1999 TO: Dwight Johnson, City Manager o, / FROM: Laurie Ahrens, City Clerk L/ SUBJECT: Minnetonka Survey Results Attached are the results of a survey conducted by the City of Minnetonka. This survey was used internally by Minnetonka to assess their organization measures including financial, performance, customer outcomes, and success in meeting the City's overall goals and strategies. However, they are sharing the results with other cities who responded to their survey. Plymouth achieved the top "A" rating in the survey, with Minnetonka immediately behind with an "A-". There were a total of 24 cities surveyed -- all suburbs over 25,000 in population. The City of Plymouth collects nearly identical information as part of our ongoing financial and budget process, Council goals process, and City survey. However, the information prepared by Minnetonka may be interesting to the Council because Plymouth is compared to a slightly different group of cities. nnetonlka 14600 Minnetonka Boulevard Minnetonka, MN 55345 APR 7 1499 Fax 612-9S9-8244 MEMORANDUM F TO: CITY MANAGERS OF METRO AREA CITIES 25,000 TO 100,000 POPULATION) FROM: DAVE CHILDS, MINNETONKA CITY MANAGER DATE: APRIL 14, 1999 SUBJECT: RESULTS OF MINNETONKA'S STUDY OF PERFORMANCE CRITERIA AS PART OF THE ORGANIZATIONAL PERFORMANCE COMPONENT OF MINNETONKA'S PERFORMANCE MANAGEMENT PROGRAM. Thanks to all of you for responding to the survey we mailed last fall and for sending copies of your Budgets and Annual Financial Statements. Many of you asked for copies of the final report and I am transmitting it with this letter. I hope that you find it interesting and useful, although I believe that you will see that the primary intent of the study is clearly for use by the City of Minnetonka in assessing its own performance. You will note that the charts for the various performance criteria do not specify any of the cities which had scores lower than our organization. I believe that identifying the organizations who had lower scores in any of these categories provides little benefit to the City of Minnetonka's Performance Management Program and could, in fact, have a negative impact for those communities who may have scored low in any particular category. This could especially be the case if the information is somehow misused or misinterpreted. Therefore, I would ask all of you to use this information carefully. And to the City of Plymouth especially... no gloating! 9 I would also like to ask all of you for some help as well. The performance criteria which Minnetonka used were selected prior to the data collection and represented our best assessment of an appropriate range of organizational measures including financial measures; performance measures; customer outcomes; and success in meeting the City's overall goals and strategies. Minnetonka... where quality comes naturally Organizational Performance Page 2 I am hopeful, however, that you will give some thought to other measures which the City could consider as we enter the second year of the Organizational Performance Component. It is not likely that we would significantly increase the number of criteria, but would be more likely to replace a category or two if we find replacements that better measure overall outcomes. In addition, are clearly looking for measures that rise to organizational significance since we are already working on a parallel track to develop outcome measures at the departmental, divisional and team levels. These will be followed with the development of individual measures at a later date. Thanks for your help on the survey, for your continuing support in identifying other appropriate performance criteria and for any other feedback you might wish to provide. We are hopeful to get all of your comments by May 5 so that we can finalize the plan and performance criteria for the coming year. Attachment B ORGANIZATIONAL PERFORMANCE MEASURES MAJOR CATEGORIES WITH COMPARISON SOURCE Found on Attachment Bond Rating By Moody's Investors Service E 24 metro cities 25,000 to 100,000 population Bonded Debt Per Capita F 24 metro cities 25,000 to 100,000 population City Tax Rate G 24 metro cities 25,000 to 100,000 population Water and Sewer Rates (15,000 Gallons) H 24 metro cities 25,000 to 100,000 population 3 Year Average of Expenditures Per Capita I - Citizen's League/Mn. Taxpayer's Assoc. reports Number of Employees Per 1000 Residents J 24 metro cities 25,000 to 100,000 population Worker's Compensation Experience Mod. Factor K 24 metro cities 25,000 to 100,000 population Quality of Life Rated as Good or Excellent L Suburban cities surveyed 1995-1998 by Decision Resources Contact with City Employees Rated as Good or Excellent M Suburban cities surveyed 1995-1998 by Decision Resources Perceived Value of City Services N Suburban cities surveyed 1996-1998 by Decision Resources Rating by City Council Regarding Achievement of City's Strategic Goals O Survey completed by City Council Attachment C Excerpt from the 1998 Metro Survey Units of Government - Groupings and Population Group 5 - Suburbs over 25,000 Bloomington 87,292 Edina 47,029 Maplewood 34,008 Brooklyn Park 61,297 Maple Grove 44,996 Woodbury 33,426 Coon Rapids 60,703 St. Louis Park 43,967 Cottage Grove 29,031 Plymouth 60,344 Blaine 43,029 Brooklyn Center 28,502 Eagan 57,757 Apple Valley 41,578 Fridley 28,267 Burnsville 56,952 Lakeville 36,002 Inver Grove Hts 26,981 Minnetonka 51,607 Richfield 34,672 Shoreview 26,118 Eden Prairie 47,840 Roseville 34,014 White Bear Lake 26,017 Attachment D Decision Resources Residential Survey Questions 1. Quality of Life Rating (Attachment L) Question: How would you rate the quality of life in excellent, good, only fair, or poor? 2. City Staff Rating (Attachment M) Question: From what you know, how would you rate the job performance of the City staff — excellent, good, only fair, or poor? 3. Value of City Services (Attachment N) Question: When you consider the property taxes you pay and the quality of City services you receive, would you rate the general value of the City services as excellent, good, only fair, or poor? 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E W ME001 LO X > > F— c/) w CY (. p Z n CO p E m WG> C p : O m >cf) CL o U L i c E u m R 0) C: Fmmi O U W J 4- O l 1 a a :>,Mm<MOOWU-Om -'Y—j2ZOo-ooM — a) > c6 p2 CnW 2>z 0( QcN W Q U N co I i AC CD N r S2 .0=>p0 CO+ -'EO'L "a) OM- C O Q z N O 0 Cf) IJ.. VJ U) AC CD N r S2 .0=>p0 CO+ -'EO'L "a) OM- C O Q z N R CIO J zL-UC Y ti v c U 0 0 LLJ 0 CD 0 0- c mm CIO J z 0 c C— Lq 0 0 LO O LO r N W wom , 1999 CITY OF PLYMOUTH APRIL 27,1999 affi, MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: April 27, 1999 TO: Plymouth Board of Review FROM: Nancy Bye, City Assessor Uf SUBJECT: 1999 BOARD OF REVIEW Attached for your review, is a report on the 1999 Assessment. The report introduces you to the statistical measurement and general information the assessing staff utilizes in determining values for the annual, January 2 Assessment. This will hopefully make your job as a member of the Board of Review easier to understand. The purpose of the Local Board of Review is to hear testimony from property owners on their objections to the Assessor's 1999 estimated market value or property classification. This may be done in three ways: (1) in person, (2) in writing, or (3) by the property owner's representative. The Board of Review is not empowered to adjust taxes, but only deal with the 1999 estimated market value or classification questions. At the conclusion of the meeting the Board of Review will recess, and will reconvene on May 11, 1999 at 7:00 p.m. Decisions on all appeals will be made at that time based on staff reports and information submitteq. Please read through the information and feel free to contact me with any questions or comments you may have before the Board convenes. Extension #5351. TABLE OF CONTENTS DESCRIPTION PAGE# LOCAL BOARD OF REVIEW AUTHORITY 1 1999 BOARD OF REVIEW SUMMARY 2 INTRODUCTION TO THE 1999 ASSESSMENT 4 INTRODUCTION TO PLYMOUTH ASSESSING DIVISION 8 1999 ASSESSMENT STATISTICS 9 ASSESSMENT TERMINOLOGY 10 1999 SALES RATIO STUDY 16 DISTRIBUTION OF MARKET VALUE 17 SINGLE FAMILY HOUSING BREAKDOWN 18 1999 ASSESSMENT SALES STATISTICS 19 RESIDENTIAL VALUE DISTRIBUTION 20 APPEAL PROCESS 22 LAKESHORE STUDY 23 ADDENDUM 24 LOCAL BOARD OF REVIEW AUTHORITY Minnesota Statutes, Section 274.01, provides that the council of each city shall be or appoint a Board of Review. The Plymouth City Charter requires that the City Council act as the Board of Review. Assessments of property are made to provide the means for the measuring of the relative share of each taxpayer in the meeting of the costs of local government. It is the duty of the Assessor to assess all real and personal property except that which is exempt or taxable under some special method of taxation. If the burden of local government is to be fairly and justly shared among the owners of all property of value, it is necessary that all taxable property be listed on the tax rolls and that all assessments be made accordingly. The authority of the local board extends over the individual assessments of real and personal property. The board does not have the power to increase or decrease by percentage all of the assessments in the district of a given class of property. Changes in aggregate assessments by classes are made by the County Board of Equalization. Although the local board has the authority to increase or reduce individual assessments, the total of such adjustments must not reduce the aggregate assessment made by the Assessor by more than one percent of aggregate. If the total of such assessments does lower the aggregate assessment made by the Assessor by more than one percent, none of the adjustments will be allowed. This limitation does not apply, however, to the correction of clerical errors or to the removal of duplicate assessments. In reviewing the individual assessments, the board may find instances of under valuation. Before the Board can raise the market value of property, it must notify the owner. The law does not prescribe any particular form of notice except that the person whose property is to be increased in assessment must be notified of the intent of the board to make the increase. The Local Board of Review meetings assure the property owner an opportunity to contest the valuation that has been placed on his/her property or to contest or protest any other matter relating to the taxability of his/her property except the tax. The board is required to review the matter and make any corrections that it deems just. 1 1999 BOARD OF REVIEW SUMMARY This past year there were changes in estimated market value of most properties located in Plymouth. Some of these value changes range from general city wide increases to substantial increases due to locational market activity. Average percentage increases in valuation are as follows: Property Type Residential Residential Lakeshore Condominiums Townhomes Apartments Commercial/Industrial Value Percent Change 4% 5% 7% 4% 12% 6% Exceptions to the above market value changes would include new construction, quartile areas, reappraisals, and/or other market adjustments. The condominium and townhouse market, after being flat for a number of years, continues to be a rapidly appreciating market. This is based on the aging baby boomers and the demand for maintenance free living. On March 30, 1999 estimated market value notices were mailed to all Plymouth property owners. State law provides that the assessment shall be an annual assessment with all property in the taxing jurisdiction re -valued to its market value every January 2"d. The City of Plymouth continues to have a high quantity of building permits. This does not include the 5,517 quartile parcels that had to be reviewed and reappraised. Continued administration of legislative changes required considerable added staff time to maintain. With the ongoing conversion of our computerized system for property appraisal, certain workloads were increased. A new property control system required extensive staff time in verifying the accuracy of the converted data. Our computerization of the assessing function of Plymouth continues to be one of the most progressive and sophisticated systems that exists in the State of Minnesota. The excellence and quality of the 1999 assessment is a direct result of this computerization. 2 1 The assessment just completed for 1999 represents many hours of staff research and time. We feel confident the 1999 assessment is fair and well equalized throughout the city of Plymouth. Respectfully submitted Assessing Department Staff 3 INTRODUCTION TO THE 1999 ASSESSMENT The 1999 Assessment affects all the property owners of Plymouth. As required by current state law, the Assessor is required to reassess all property every year. State Statute reads: "All real property subject to taxation shall be listed and assessed every year with reference to its value on January 2 preceding the assessment." This has been done and the owners of property in Plymouth have been notified of any change. Minnesota State Statute 273.11 reads: "All property shall be valued at its market value. It further states that "in estimating and determining such value, the Assessor shall not adopt a lower or different standard of value because the same is to serve as a basis for taxation, nor shall he adopt as a criterion of value the price for which such property would sell, or in the aggregate with all the property in the town or district but he shall value each article or description of property by itself, and at such sum or price as he believes the same to be fairly worth in money." The statute says all property shall be valued at market value. This means that no factors other than market (such as economics, personalities or politics) shall affect the Assessor's value and the subsequent action by the Board of Review. Market value has been defined many different ways. Simply stated, it is "the highest price estimated in terms of cash which a property will bring if exposed for sale on the open market by a seller who is willing but not obligated to sell, allowing a reasonable time to find a purchaser who is willing but not obligated to by, both with knowledge of all the uses to which it is adapted and for which it is capable of being used." The real estate tax is an ad valorem tax which is based on the value of property and not on the ability of the property owner to pay. The values placed on all real estate in Plymouth are based on the amount of land and the improvements upon the land, while no consideration is given to who owns the land. The 1999 Assessment (not the 1999 taxes) reflects an increase of 8.9% overall valuation over the 1998 assessment (including new construction, quartile adjustments, and/or market adjustments). This can be demonstrated as follows: 1998 TOTAL CITY VALUE 1999 TOTAL CITY VALUE PRELIMINARY) 1999 PERCENTAGE 4,458,401,900 4,854,644,500 Total Value Increase: 396,242,600 8.9% Value of New Construction: 139,924,500 3.1% Appreciation of Existing Property: 256,318,100 5.8% 4 TOTAL PERCENT VALUE GROWTH OF PLYMOUTH 12. 10. H Z W 0 6. W a 4. 2. 0a 1993 1994 1995 1996 1997 1998 1999 5 1999 ASSESSMENT INTRODUCTION During this past year, our staff has concentrated on collecting field data on field propertycards. Once collected the data was entered into and calculated by the computer system. The output is then analyzed for accuracy and parity. Those areas of the city that equal 25% of all existing properties have been physicallyreviewedduring1998andrepresentover5,500 parcels, excluding 2,185 building permits. This is commonly referred to as the "Quartile". In the areas of re -inspection, new itemsthatpreviouslywerenotonourrecordswereadded, or where applicable, deleted. 71 % ofallhomesreviewedwereinternallyinspected. A preliminary sales study was analyzed, prior to placing a final value on each property inspected. Plymouth's preliminary residential median ratio entering the 1999 assessment was 89.4%. This is determined by Hennepin County comparing the January 2, 1998 estimated marketvaluestosalesoccurringfromOctober1, 1997 through September of 1998. The averageresidentialincreasefortheJanuary2, 1999 assessment was 4%. This was determined bycomparingtheJanuary2, 1999 estimated market values to the same sales, thus establishingthe1999estimatedmarketvaluesatamediansalesratioof93.9 and a mean ratio of 93.8withacoefficientofdispersionof6.2. In accordance with the results of this sales study, certain areas of the city, certain styles of houses and certain sizes of houses were adjustedinvalue, either lower or higher than the original value, to more properly reflect actualmarketvalues. The average mean sale price of existing housing stock in the City' in 1998 was $206,300, this does not include townhouses or condos. This is extracted from the Hennepin CountyRatioStudyofallarms -length transactions involving single family homes. Lakeshore in Plymouth was adjusted according to the sale activity on the lakes in general, as well as studies, to determine if the number of bedrooms per unit affected the sales price. The average lakeshore property received an increase of approximately 5%. The averagesalepriceofexistinglakeshorepropertyin1998was $335,400. Various townhouse and condominium complexes were adjusted according to marketactivityaswellasstudiestodetermineifthenumberofbedroomsperunitaffectedthesalesprices. The average increase to the townhouses and condominiums was between4 %and 7%. The sale activity of condominiums and townhouses was brisk in 1998. Themarketwasstrongonexistingtownhousesrangingfrom $75,000 to $170,000 and existingcondominiumsranginginsalepricefrom $75,000 to $125,000. Z Commercial/Industrial property values increased an average of 6% from 1998 to 1999. This increase was due to several factors: market sales, increasing rents and profits to owners, economic recovery which has created demand for new construction. The one year property growth does not represent the rate of inflation of the Consumer Price Index. 1999 Apartment property values increased an average of 12% from 1998 to 1999. The factors contributing to this increase were the market activity, increase in rents and the very low vacancy rates in Plymouth. The value we place on the property is accomplished only after we have conducted thorough studies in the market place. Costs of replacement are checked with builders in the area, as well as cost manuals that are available, which are put together by experts in the field of building and appraising. Sales of property are constantly analyzed to see what is happening in the market place. The assessors/appraisers do not create value, they only measure its movements. Assessing property values equitably is partly science, partly judgment, partly communication skills, and largely a mystery to many property owners. Add to that the fact that property construction, financing and ownership are more complex today than ever before and the task becomes more difficult. Training cannot tell us how to find the "perfect" value of a property, but training can consistently produce the same estimate of value for identical property by different assessors. That, after all, is a working definition of equalization. The following pages contain information that hopefully will inform you and make your job as a member of the Board of Review a more productive one. 7 Plymouth Assessing Department City Assessor Nancy D. Bye Senior Appraiser Commercial Appraiser Jan Olsson Earl Zent Appraiser Appraiser Appraiser Bev Moos Joan McCormick Paul Kingsbury Accounting/Assessment Clerk Shelia Schultze E Senior Clerk Typist Vacant 1999 ASSESSMENT STATISTICS Total City Parcel Count (01-02-98) 21,775 Total City Parcel Count (01-02-99) 22,068 Parcel Count Per Appraiser 1998 Assessment 4,355 Parcel Count Per Appraiser 1999 Assessment 4,414 Assessor's Industry Standard per Appraiser 3,000 1998 Total Estimated Market Value $4,458,401,900 1999 Total Estimated Market Value (Preliminary) $4,854,644,500 1997 to 1998 Total City Valuation Growth +8.3% 1998 to 1999 Total City Valuation Growth +8.9% 1997 Total Building Permits 2,100 1998 Total Building Permits 2,185 1997 Plymouth's Average Home Sale Price 192,800 1998 Plymouth's Average Home Sale Price 206,300 Does not include townhouses or condos) 1998 "Median" Sales Ratio (Assessment Level) 93.8% 1999 "Median" Sales Ratio (Assessment Level) 93.9% 1999 Hennepin County Median Sales Ratio 94.4% 1998 Coefficient of Dispersion (Assessment Accuracy) 6.0% 1999 Coefficient of Dispersion (Assessment Accuracy) 6.2% 1997 Approximate Number of Sales (including new construction) 1,600 1998 Approximate Number of Sales (including new construction) 1,800 r ASSESSMENT TERMINOLOGY AD VALOREM TAX - A tax varying with the value of a good or commodity; a real estate tax based on the value of the property. APPRAISAL - An estimate or opinion of value. The act or process of estimating value. The resulting opinion of value derived from the appraisal may be informal, transmitted orally; or it may be formal, presented in written form. Usually it is a written statement setting forth an opinion of the value of an adequately described property as of a specified date, supported by the presentation and analysis of relevant data. APPRAISER - One who estimates value; specifically, one who possesses the necessary qualification, ability and experience to execute or direct the appraisal of real property. CAPITALIZATION - The process of converting into present value (or obtaining the present worth of) a series of anticipated future periodic installments of net income. In real estate appraising, it usually takes the form of discounting. CAPITALIZATION RATE - The sum of a discount and a capital recapture rate. It is applied to any income stream with a finite term over which the invested principal is to be returned to the investor lender. CITY MARKET VALUE RATE - Established in 1996 (payable 1997 taxes) as a direct computation against the market value to offset the purchase of open space for nature areas and trails. CLASS RATE - Statutory percentage applied to the estimated value of a parcel based on the parcel's classification. Formerly known as tax capacity rate or percentage. CLASSFICATION OF PROPERTY - The classification of property after the valuation is complete to identify the property as residential, commercial, homestead, non -homestead, etc. Each class refers to a different statutory assessment rate. It is based on the use as of the assessment date. COEFFICIENT OF DISPERSION: (Assessment Accuracy) - In statistics, the measure of absolute dispersion to an appropriate average. A measure of relative dispersion. Sometimes referred to as an "index of assessment inequality". Under 10% is in the excellent range. COST APPROACH - That approach in appraisal analysis which is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly 10 ASSESSMENT TERMINOLOGY (continued) applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land or when relatively unique or specialized improvements are located on the site and for which there exist no comparable properties on the market. DEPRECIATION - A loss of utility and hence value from any cause. An effect caused by deterioration and/or obsolescence. There are several types of depreciation. PHYSICAL DEPRECIATION - A reduction in utility resulting from an impairment of physical condition. For purposes of appraisal analysis, it is most common and convenient to divide physical deterioration into curable and incurable components. PHYSICAL CURABLE DEPRECIATION - Physical deterioration which the prudent buyer would anticipate correcting upon purchase of the property. The cost of effecting the correction or cure would be no more than the anticipated addition to utility, and hence ultimately to value, associated with the cure. PHYSICAL INCURABLE DEPRECIATION - Physical deterioration which in terms of market conditions as of the date of the appraisal is not feasible or economically justified to correct. The cost of correcting the condition or effecting a cure is estimated to be greater than the anticipated increase in utility, and hence ultimately in value, of the property that will result from correcting or curing the condition. FUNCTIONAL DEPRECIATION - Impairment of functional capacity or efficiency. Functional obsolescence reflects the loss in value brought about by such factors as over capacity, inadequacy and changes in the art, that affect the property item itself or its relation with other items comprising a larger property. The inability of a structure to perform adequately the function for which it is currently employed. ECONOMIC OBSOLESCENCE - Impairment of desirability or useful life arising from factors external to the property, such as economic forces of environmental changes which affect supply -demand relationships in the market. Loss in the use and value of a property arising from the factors of economic obsolescence is to be distinguished from loss in value from physical deterioration and functional obsolescence, both of which are inherent in the property. Also, referred to as Location or Environmental Obsolescence. 11 ASSESSMENT TERMINOLOGY (continued) EDUCATION HOMESTEAD CREDIT - The new education homestead credit reduces school district taxes on residential homesteads and on the house, garage and one acre of land for farm homesteads. The funds go directly to the state determined general education fund of each school district. ESTIMATED MARKET VALUE - The value which the Assessor has estimated the property to be worth. EQUALIZATION - The adjustment of assessed valuation of real property in a particular area to establish a more equitable division of the total tax burden within the area. FISCAL DISPARITIES - Program which provides for the sharing of 40 percent of the growth of the commercial/industrial tax base in the seven county metro area since 1971. A percentage of the property tax on each commercial/industrial parcel is calculated at the seven county uniform rate. GEOCODE NUMBER - A geographically related parcel numbering system. The numer contains thirteen digits made up of section, township, range, quarter -quarter and parcel. The first seven digits, based on the public land survey, geographically locate the section in which the property is located. The next two digits will designate in which quarter - quarter the property is located. The ten through thirteen digits indicate the parcel within the quarter -quarter. The parcels will be numbered consecutively beginning with 0001. When a division is made, the next consecutive available number(s) will be assigned, and the old number(s) will be retained for historical data. GROSS TAX CAPCITY - A parcel's estimated market value multiplied by the gross class rate for that type of property. Formerly known as assessed value. HIGHEST AND BEST USE - That reasonable and probable use that will support the highest present value, as defined, as of the effective date of an appraisal. HOMESTEAD AND AGRICULTURAL CREDIT AID (HACA) - Replaces homestead credit and agricultural credit. The State gives this aid directly to the local units of government. HOMESTEAD FULL YEAR - Property is granted a lower assessed value if the owner lives in and owns the property as of January 2. If a person owns and occupied their home up until December 1, they receive a mid year homestead which carries the full homestead benefits payable the following year. For example, the January 2, 1998, classification affects the taxes payable in 1999. 12 ASSESSEMENT TERMINOLOGY (continued) NON -HOMESTEAD - Residential property that does not qualify for a full year or half year homestead. The tax capacity is higher, hence a higher tax. INCOME APPROACH - That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process. LEGAL DESCRIPTION - The formal way to describe a parcel of property typically metes and bounds, lot and block or government survey. LIMITED MARKET VALUE - The Legislature in its 1993 session passed a law imposing a limit on how much an assessor's estimate of market value is permitted to increase from one year to the next. Under the law, assessors are required to continue to estimate the market value of all properties. However, the law requires the use of a limited market value for purposes of determining property tax bills. Approximately 1,900 parcels in the City qualify for a limited value. These properties are taxed on their limited market value, not their estimated value. LOCAL TAX RATE - Rate of tax applied to the tax capacity of property to calculate the tax due. Formerly known as tax capacity rate, mill rate. MARKET VALUE - The most probable price in terms of money which a property will bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. MASS APPRAISAL - A method used in valuation of a jurisdiction for tax purposes. As the term implies, it is a method of appraising a large number of properties at one time by adopting standard techniques, and giving due consideration to the appraisal process so that uniform or equality of values may be achieved between all properties. METES AND BOUNDS - A description of a parcel of land by reference to the courses bearings, that is, the angles east or west of due north or due south) and distances (usually in feet or chains) of each straight line which forms its boundary, with one of the corners tied to an established point; that is the bearing and distance from an established point; such as a section corner or to the intersection of the center lines of two roads, etc. If one part of the boundary is on a curve, this part is described by showing the number of degrees of the central angle subtended by the curve (arc), the length of the radius, and the length along the curve. 13 ASSESSMENT TERMINOLOGY (continued) PARCEL - A piece of land, with or without improvements, in one ownership. PRICE RELATED DIFFERENTIAL: (Assessment Difference) - A statistic used to measure the assessment differences that may exist between higher priced properties vs. lower priced properties. 100 points is ideal. Within 10 points of 100 is considered excellent. PROPERTY TAX REFUND - All homeowners with household income below $61,930 OR where the property taxes increased more than 12% over last year, may be eligible for a property tax refund. SALES COMPARISON APPROACH - Traditionally, an appraisal procedure in which the market value estimate is predicated upon prices in actual market of value in a static or advancing market (price wise), and fixing the higher limit of value in a declining market; and the latter fixing the higher limit on any market. It is a process of analyzing sales of similar recently sold properties in order to derive an indication of the most probable sales price of the property being appraised. The reliability of this technique is dependent upon a) the availability of comparable sales data, (b) the verification of the sales data, (c) the degree of comparability or extent of adjustment necessary for time differences and (d) the absence of non -typical conditions affecting the sale price. SALES RATIO (Assessment Level) - The ratio derived by dividing a property's sale price into the Assessor's estimated market value. SALES RATIO ANALYSIS - Study of the relationship between the Assessor's values, sales prices and the deviations resulting from differences between the two. The purpose of such an analysis is to determine the efficiency, equity, quality and fairness of assessing activities of a particular neighborhood or jurisdiction. SCHOOL MARKET VALUE RATE - Established in 1995 (payable 1996) as a direct computation against the market value after the passing of school bond referendums. SPECIAL ASSESSMENT - Street, sewer, water, curb, or other infrastructure costs that are incurred by a city/township and assigned to benefiting properties. THIS OLD HOUSE" - The Legislature, in its 1993 session, passed a law to exempt from the property tax all or a portion of the value of improvements made to homes 35 years of age or older (Article 5, Section 13 of the Omnibus Bill). The law is designed to provide owners of older and deteriorated homes with an incentive to restore or renovate their homes. In turn, is hoped that this will ultimately lead to the preservation of aging homes in rural communities. 14 ASSESSMENT TERMINOLOGY (continued) To qualify for the exemption of improvements from the property tax, the property must be 35 years of age or older at the time the improvements commence and it must be receiving the homestead classification or will be receiving the homestead classification by December 1" of the year the improvement is made. Only the improvements made to the residence and garage, or the construction of a new garage qualify for the exemption. An application must be made to the Assessor's Office for the exemption. Improvements such as swimming pools and yard improvements are not included. Only improvements which contribute to increase the value by $1,000 or more may be eligible for the exemption. If more than 50 per cent of the square footage of the house or fifty percent of the value is increased, it shall constitute a new home and not qualify. All homes valued at $150,000 or more do not qualify. To qualify for exemption, the homeowner must have obtained a building permit. The exemption shall be applied to no more than 3 separate improvements made to the house or garage. The homeowner has the right to pick which 3 permits to have exempted, but once it has been selected it cannot be repealed or replaced by a later improvement. The total qualifying value is dependent upon the age of the residence. Houses that are less than 35 years of age, do not qualify. The qualifying value of houses that are at least 35 years of age, but less than 70 years, is limited to one-half of the value of the improvement up to a maximum exemption of $25,000. Houses that are 70 years of age, or older, are eligible to have the actual of any improvements excluded, up to a maximum of $50,000. The valuation of the improvement shall be calculated and determined by the Assessor and shall be based on the increase in market value of the year period and once the value of the improvement is established by the Assessor, it remains frozen during the ten year period of exclusion; however, the inflationary trend for the total value of the property, including that portion attributable to the addition, will be eligible for taxation. Under the law beginning April 1, 1994, owners must disclose to prospective buyers whether any improvements made to the home are exempt from property tax. Owners are also required to notify buyers that the exemption will terminate when the property is sold. The exemption for the value of the improvement remains in effect for 10 years beginning with the initial assessment year in which the improvements contributed to the value of the house or garage. After the 10 year period has expired, the exemption is reduced every year by one-fifth or 20 percent of the total value of the improvement. This amount is added back to the taxable value of the property. By the end of the 15' year, the full value of the improvement is subject to the property tax. The following pages discuss the methodology and our 1999 Sales Ratio Study. We are fortunate in Plymouth to have a very active market with numerous sales to be able to accurately measure our assessment. 15 1999 SALES RATIO STUDY Equalizing is done in today's procedures through ratio studies. These studies compare the Assessor's value with that same property's actual sale price. This comparison gives us ratio indicators that are recognized by the County and the State Commissioner of Revenue. The ratio indicators must reach acceptable levels or they will trigger corrective action for general across-the-board adjustments by the County Assessor or the Commissioner of Revenue. These general corrections are essentially a "shotgun blast" type correction that affects the adequate and inadequate values alike, and although they correct equalization across jurisdiction lines, they do just the opposite within a jurisdiction by increasing inequity. In Plymouth, this type of correction was received on Industrial properties for the 1998 assessment, (-5% to building value). Fortunately it has never been done to residential properties. The 1999 sales study recently completed by our staff and Hennepin County places our overall median ratio at 93.9%. Hennepin County's average median ratio is 94.4% which puts Plymouth below the average and dictates that jurisdictions at or above the median carry a slightly greater share of the load. We want to be the leader in most other areas, however, in equalization ratio studies we certainly don't want to be at or near the top. The Commissioner of Revenue and the Hennepin County Assessor have mandated that any jurisdiction falling below a 90.0% plateau will be forced into corrective action, and then everyone suffers. Our coefficient of dispersion in this year's study is 6.2%. This is comparable to other jurisdictions of our size in Hennepin County. (Anything under 10 is considered excellent.) This is a direct result of our computerization of the appraisal process and demonstrates our ability to administer fair and equalized valuations at both ends of the value spectrum. Our price related differential fluctuated between 99 and 101. This also shows our ability to treat higher priced homes as equally as the lower priced homes. It is curently at 100.4, 100 is considered perfect . B COM0 25% DISTRIBUTION OF ESTIMATED MARKET VALUE BY PROPERTY TYPE 1999 APARTMENTS CO/ Residential Commercial/Industrial Apartments TOTAL EMV ESTIMATED MARKET VALUE Percentage 69.64% 25.00% 5.36% 1999 3,380,692,600 1,213,697,200 260,254,700 4,854,644,500 17 1998 3,148,110,700 1,079,589,200 230,702,000 4,458,401,900 DENTIAL 70% MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: April 13, 1999 TO:' Assessing Staff FROM: Nancy Bye, City Assessor SUBJECT: SINGLE FAMILY LIVING UNIT COUNT BREAKDOWN TOTAL CITY) The following is a listing of the type and the number of living units for each that is on the tax rolls for assessment year January 2, 1999. 1998 ASMT TYPE OF DWELLING # OF UNITS Apartment Units 5,413 Single Family Homes 14,856 Condominiums 2,342 Townhomes 2,165 Permalease 60 Mobile Homes 62 Farm Houses 24 Seasonal Res. (Cabins) 8 TOTAL LIVING UNITS: 24,930 1999 Assessment represents an increase of 609 living units over January 2, 1998. 18 MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: . February 17, 1999 TO: Nancy Bye, City Assessor FROM: Jan Olsson Senior Appraiser SUBJECT: 1999 ASESSMENT - HENNEPIN COUNTY STUDY SALES STATISTICS OVERALL SALES RATIO 1999 Estimated Market Values were used on all sales) STYLE OF SALES AVG. SALE PRICE MEAN RATIO Ramblers 141 163,600 949 Splits 257 162,400 939 Two Stories 309 242,100 944 Rambler - Cluster Homes 14 218,500 954 Splits - Cluster Homes 16 157,400 925 Two Stories - Cluster Homes 10 213,000 1.00 Condominiums 237 71,400 936 Townhomes 139 112,700 942 TOTAL 1,123 The above figures are based on the sale of existing homes that meet the state criteria for arm's length transactions. Approximate Number Homes Sold Including New Construction 2,100 Average Sale Price of Single Family Homes $206,300 cc: Appraisal Staff W PLYMOUTH RESIDENTIAL PROPERTY VALUE DISTRIBUTION 1998 VALUE PERCENT OF HOMES UNDER $50,000 2.49 473 50,001 TO'$100,000 15.57 2,963 100,001 TO $200,000 57.01 10,850 200,001 TO $300,000 19.20 3,655 300,001 TO $400,000 4.64 884 400,001 TO $500,000 87 166 OVER $500,000 22 42 TOTAL 100.00 19,033 60%-1 50 40 f - Z v 30 ixw a 20 10 0%- I 1 C M Z M f d 0 I 1 M l o O o O o O O O M CD M 00 CD N IM d IM O O OO O O O O 0%- I 1 C M Z M 1 1 M 64 I 1 M O moOooO c:) O O O O M CD M 00 CD N IM d I M O O OO O O O O O O O OO OO O O O OOO VALUE 20 PLYMOUTH RESIDENTIAL PROPERTY VALUE DISTRIBUTION 1999 VALUE PERCENT OF HOMES UNDER $50,000 2.18 422 50,001 TO $100,000 12.83 2,475 100,001 TO $200,000 56.60 10,921 200,001 TO $300,000 21.18 4,087 300,001 TO $400,000 5.70 1,100 400,001 TO $500,000 1.16 223 OVER $500,000 35 67 TOTAL 100.00 19,295 60% 50 40 F z 30 wa 20 10 0 c va 0 0 r O oN eft 0O o w 0 O 0 w o o 0 O m o 0 e4 00 O O OO i M OO O bO OO O cnOO O 0o O OO O O CDO VALUE CDO CDO z x i tru c va 0 0 r O oN eft 0O o w 0 O 0 a+ 0 o CD0 w o o 0 O m o 0 e4 00 O O OO NCDO OO M OO O bO OO O cnOO O 0o O OO O O CDO VALUE CDO CDO 21 MARKET VALUE APPEAL PROCESS NOTICE OF MARKET VALUE DISCUSS WITH ASSESSOR'S OFFICE LOCAL BOARD OF REVIEW DENY APPEAL COUNTY BOARD OF EQUALIZATION CHANGE VALUE STATE TAX COURT 22 ABATEMENT PROCESS ADMINISTRATIVE REVIEW) APPROVE APPEAL DENY APPEAL 1999 RESIDENTIAL LAKE SHORE SALES STUDY 1998 SALES) NUMBER NAME 1YEAR AVERAGE AVERAGE OF OF OF LOT SALE PARCELS LAKE SALES VALUE PRICE 115 Bass 5 80,000 TO 347,800 175,000 37 Gleason 0 60,000 TO 0 130,000 48 Hadley 2 70,000 TO 352,400 165,000 33 Lost 1 66,000 TO 300,000 105,000 141 Medicine 3 105,000 278,400 43 Mooney 2 90,000 TO 342,500 180,000 53 Parkers 0 0 0 8 Pike 1 70,000 TO 477,000 75,000 60 Schmidt 0 95,000 TO 0 100;000 530 parcels 14 sales Before increases) 87.8 Lakeshore Preliminary Ratio Hennepin County Sales Study of all Residential Lake Shore Sales in Plymouth for the 1999 Assessment: TOTAL SALES: 14 MEAN RATIO: 93 % (after increase) Lakeshore properties were given a city wide average increase, then attention was paid to the location of the lakes, the similarity of the lakes, and the market activity in the last year in the various neighborhoods surrounding each lake to determine if further adjustments were necessary. 23 ADDENDUM 24 n's. • , ,r,,...,., - i#, a' '3'g,., '..%j tia 4 zF 3 „ z fi r!^C:e°^4v"n'Lx S" >' .v }':"` •,-spy. <*. ; ny h- 4 • r'.i'`>A'r.-...y `6i MI:iMO s%.-tq;." ' Si .'# s ,"5 .-) C.. r . NA"4 9'Myil CITY OF PLYMOUTH ,»X kms '#`*' ° :. , 'Y'%=r'f. • , , • :•. , . '_ 'e^?,'a..4``3 V' ak` ' s ' w. 3400 PL_ YMOUTH BOULEVARD, PLYMOUTH; MN'' 55447 ` zY r 4 , ,.. `"i Y :• } ' xs.G.Y) ,p *.r, S; ; c a rZ ," :4'' F x f'Yt ? a Y. ,+iw "'. a. Xa.;9%' f,7> x a ,d.,*,.t', 3,,. • ."? R?SS"t' , , .. :t ;. DATE: February 25, 1999 TO: Nancy D. Bye, City Assessor C FROM: Jan Olsson, Senior Appraiser SUBJECT: 1999 PROPERTY TAX SUMMARY The 1999 tax extension rates have recently been released from Hennepin County. Tax statements are scheduled to be mailed the first week in March. To better prepare ourselves to respond to citizen inquiries, we have updated our charts, graphs, and comparison data (attached). Market values on most residential properties were increased approximately 2% affecting payable 1999 taxes (excluding quartile areas). Commercial/Industrial properties were increased approximately 8% and apartments increased approximately 12% in value. The last few years there have been additional property taxes levied due to the passing of school bond referendums, school market value, city market value and solid waste market value. There has also been the introduction of the education homestead credit. Effective in 1995 (payable 1996) the school market value rate was established as a direct computation against the market value of individual properties after the passing of school bond referendums. This money goes directly to the school districts. The city referendum market rate was established in 1996 (payable 1997) as a direct computation against the estimated market value of individual properties to offset the purchase of open space to be preserved for nature areas and trails, and an additional levy was approved in 1998 (Payable 1999) for the Activity Center/Field House. The county solid waste fee continues this year at a rate of .01904%. This fee is calculated directly against the market value of each parcel. The education homestead credit reduces school district taxes on residential homesteads and on the house, garage and one acre of land for farm homesteads. The rate is uniform within a school district. The maximum credit is $320 and cannot be greater than the total school district tax. The funds go entirely to the state determined general education fund of each school district. The following is an example of how to calculate 1999 Payable taxes: Market Value for 1998 Pay 1999 Classification: Step 1 15` $75,000 0.010 Class Rate 750.00 Base I 190,000 Residential Homestead Tax Capacity Calculation Step 2 115,000 Remainder P 0.0170 Class Rate 1,955 Base II 118.030% Tax Extension Rate 2,705 Tax Capacity of Parcel 3,192.71 Base Tax Step 3 750 Base I 1,955 Base II 2,705 Tax Capacity of Parcel Market Rate Calculations School Market Rate $190,000 @.22255% = $422.85 City Market Rate $190,000@.01443%=$ 27.42 Solid Waste Rate $190,000 @.01904% _ $ 36.18 486.45 Composite Market Value Rate Tax Calculation Step 1 $3,192.71 Base Tax 486.45 Market Value Tax (School, City and Waste Rate) 3,679.16 Step 2 Education Homestead Credit (Maximum Credit = $320) 2,705 Tax Capacity x 24.543% EHC Rate 663.89 Step 3 $3,679.16 Tax before EHC 320.00 Maximum Credit 3,359.16 1999 Payable Tax Even though the legislative changes have made property tax calculations more cumbersome, it is interesting to note, in most cases, if the market value remained unchanged, the taxes decreased. A surplus in the state budget has also resulted in a property tax rebate to be issued to the majority of Minnesota residents for taxes payable in 1999. Our contribution share to the fiscal disparities pool for Commercial/Industrial properties increased from 31.8616% last year to 33.5494% this year. The seven county area wide rate has increased from 155.082% in 1998 to 157.373% for 1999. cc: Dwight Johnson, City Manager Kathy Lueckert, Assistant City Manager Dale Hahn, Finance Director Assessing Division WAYZATA DIST. 0284 10 1998 TAX EXT RATE: 1.18030 ESTIMATED MV RATES: .0025602 MARKET ED HMSTD CR: .24543 WAYZATA DIST. #28413 TAX EXT RATE: 1.18855 MV RATES: .0025602 ED HMST CR: .24543 nil u\ICT ROBBINSDALE OSSEO DIST.#281 DIST.#279 TAX EXT RATE: 1.11926 TAX EXT RATE: 1.18547 MV RATES: .0023038 MV RATES: .0021912 ED HMSTD CR: .23671 ED HMSTD CR:.23421 HMST MON_HMST HMST lJ0N_HMRT HOPKINS DIST. #270 TAX EXT RATE: 1.23151 MV RATES:.0012053 ED HMSTD CR:.25075 HMST NON-HMST nLVC 25,000 298 433 300 435 278 407 293 425 275 415 30,000 357 519 360 523 334 489 351 510 330 498 35,000 417 606 420 610 390 570 410 595 385 581 40,000 476 693 480 697 445 652 468 680 441 664 45,000 536 779 540 784 501 733 527 765 496 747 50,000 595 866 600 871 556 815 585 850 551 630 60,000 715 1,039 719 1,045 668 978 702 1.021 661 996 65,000 774 1,125 779 1,132 723 1,059 761 1,106 716 1,079 70,000 834 11212 839 1,219 779 1,141 819 1,191 771 1,162 75,000 893 1,299 899 1,306 835 1,222 878 1,276 826 1,245 80,000 985 1,412 992 1,420 921 1,329 970 1,387 937 1,356 85,000 1,078 1,525 1,085 1,534 1,008 1,435 1,061 1,499 1,028 1,466 90,000 1,170 1,638 1,178 1.648 1,094 1,542 1,153 1,611 1,120 1.577 95,000 1,262 1,751 1,271 1,762 1,181 1,649 1,245 1,723 1,212 1,688 100,000 1,354 1,864 1,364 1,875 1,267 1,755 1,337 1,834 1.303 1,798 105,000 1,447 1,977 1,457 1,989 1,354 1,862 1,429 1,946 1,362 1,909 110,000 1,549 2,090 1,560 2,103 1,440 1,969 1,520 2,058 1,469 2,020 115.0001 1,662 2,204 1,674 2,217 1,545 2,075 1,627 2,169 1,580 2,131 120,000 1,775 2,317 1,788 2,331 1,652 2,182 1,739 2,281 1,690 2,241 125,000 1,889 2,430 1,902 2,445 1,759 2,289 1,851 2,393 1,801 2,352 130,000 2,002 2,543 2,016 2,558 1,865 2,395 1,962 2,505 1,912 2,463 135.000 2,115 2,656 2,129 2,672 1,972 2,502 2,074 2,616 2.022 2,573 140,000 2,228 2,769 2,243 2,786 2,079 2,609 2,186 2,728 2,133 2,684 145,000 2,341 2,882 2,357 2,900 2,185 2,715 2,298 2,840 2,244 2,795 150,000 2,454 2,995 2,471 3,014 2,292 2,822 2,409 2,952 2,355 2,906 155,000 2,567 3,109 2,585 3,128 2,399 2,929 2,521 3,063 2,465 3,016 160,000 2,680 3,222 2,698 3,241 2,505 3,035 2,633 3,175 2,576 3,127 165,000 2,794 3,335 2,812 3,355 2,612 3,142 2,744 3,287 2,687 3,238 170,000 2,907 3,448 2,926 3,469 2,719 3,249 2,856 3,398 2,797 3,348 175,000 3,020 3,561 3,040 3,583 2,825 3,355 2,968 3,510 2,908 3,459 180,000 3,133 3,674 3,154 3,697 2,932 3,462 3,080 3,622 3,019 3,570 185,000 3,246 3,787 3,268 3,810 3,039 3,569 3,191 3,734 3,130 3,680 190,000 3,359 3,900 3,381 3,924 3,145 3,675 3,303 3,845 3,240 3,791 195,000 3,472 4,014 3,495 4,038 3,252 3,782 3,415 3,957 3,351 3,902 200,000 3,585 4,127 3,609 4,152 3,359 3,888 3,526 4,069 3,462 4,013 210,000 3,812 4,353 3,837 4,380 3,572 4,102 3,750 4,292 3,683 4,234 225,000 4,151 4,692 4,178 4,721 3,892 4,422 4,085 4,627 4,015 4,566 250,000 4,717 5,258 4,747 5,290 4,425 4,955 4,644 5,186 4,569 5,120 260,000 4,943 5,484 4,975 5,518 4,639 5,168 4,867 5,409 4,790 5,341 275,000 5,282 5,824 5,317 5,859 4,958 5,488 5,202 5,745 5,122 5,673 300,000 5,848 6,389 5,886 6,429 5,492 6,022 5,761 6,303 5,676 6,227 350,000 6,979 7,521 7,024 7,567 6,558 7,088 6,878 7,420 6,783 7,334 400,000 8,110 8,652 8,162 8,705 7,625 8,155 7,995 8,538 7,890 8,441 450,000 9,242 9,783 9,301 9,843 8,691 9,221 9,113 9,655 8,997 9,548 400,000 8,110 8,652 8,162 8,705 7,625 8,155 7,995 8,538 7,890 8,441 450,000 9,242 9,783 9,301 9,843 8,691 9,221 9,113 9,655 8,997 9,548 600.000 12,636 13,177 12,715 13,258 11,891 12,421 12,464 13,006 12,318 12,869 650,000 13,767 14,308 13,854 14,396 12,958 13,488 13,581 14,124 13,425 13,976 1999 CITY OF PLYMOUTH RESIDENTIAL IST $75,000 @.0100 OVER $75,000 @.0170 NON -HOMESTEAD IST $75,000 @.0125 OVER $75,000 @.0170 LAND -RESIDENTIAL - NON HOMESTEAD ENTIRE VALUE @.0170 LAND -COMMERCIAL IST $150,000 @.0245 OVER $150,000 @.0350 MV RATES = CITY & SCHOOL MV RATE SOLID WASTE FEE PROPERTY TAX COMPARISON Payable 1989 Through 1999 270 Hopkins School District 284 Wayzata School District Payable Market Property Tax Tax Market Property Tax Tax Year Value Taxes to Value Rate Value Taxes to Value Rate 1989 83,500 944 1.13 88.540 134,100 2,593 1.93 97.379 1990 83,500 909 1.09 91.798 134,100 2,332 1.74 99.548 1991 84,900 1,084 1.28 106.494 137,400 2,415 1.76 103.120 1992 84,900 1,147 1.35 117.262 137,400 2,415 1.78 114.512 1993 85,900 1.252 1.46 125.434 138,400 2,563 1.85 125.160 1994 88,600 1,344 1.50 127.734 148,300 2,697 1.50 120.0110 1995 97,000 1,634 1.60 133.978 155,000 2,840 1.80 119.316 1996 100,600 1,679 1.67 129.524 161,600 3,285 2.03 118.4.53 1997 103,300 1,592 1.54 117.515 166,200 3,214 1.93 107.842 1998 113,300 1,666 1.47 120.735 1 1 169,500 3,003 1.77 111.676 1999 115,600 1,593 1.40 123.151 1 172,900 2,972 1.72 118.030 The same value of $ 172,900 in Watershed 3 would have taxes of $2,992. 281 279 Robbinsdale School District Osseo School District Payable Market Property Tax Tax Market Property Tax Tax Year Value Taxes to Value Rate Value Taxes to Rate_ Value 1989 97,100 1,390 1.43 96.004 167,600 3,839 2.32 106.280 1990 97,100 1,316 1.36 104.297 167,600 3,603 2.15 107.628 1991 99,300 1,415 1.42 108.377 171,800 3,761 2.19 111.480 1992 99,300 1,452 1.46 114.682 171,800 3,652 2.13 121.725 1993 100,300 1,570 1.56 122.058 172,800 3,425 1.98 125.199 1994 104,000 1,697 1.60 124.794 189,600 3,907 2.00 127.179 1995 107,700 1,808 1.60 126.099 198,000 4,181 2.10 129.044 1996 111,400 1,856 1.67 123.104 205,300 4,529 2.21 125.497 1997 119,500 2,000 1.67 119.388 208,700 4,292 2.06 118.2'97 1998 132,600 2,090 1.58 125.022 1 1 218,400 4,185 1.92 116.058 1999 141,900 2,129 1.50 111.926 1 1 220,700 3,391 1.54 118.547 Taxes include both the tax extension rate, school, city and solid waste market value rates where applicable as well as the new education tax credit. The properties used in this study are four ouses of various market values (one from each of the four school districts within the city of Plymouth). For purposes of comparability, all subject houses are classified residential homestead, are maintained in average condition and have not been improved with any additions. All estimated market values were increases during the years for inflation, quartile and/or market adjustments. Beginning with 1989 Payable Taxes, Mill Rates were replaced with Tax Extension Rates. 1996 was the first year Plymouth had School Market Value Rates due to the passing of school referendums. 1997 is the first year Plymouth had City Market Value Rates. 1998 was the first year Education Tax Credits were introduced. JLO 2/23/99 TAX CAPACITY RATE BREAK DOWN Payable 1995-1999 City of Plymouth 281/Robbinsdale School 67.197 ff,4041V VVAY44I4 63.757 65.350 School 1995 1996 1997 1998 1999 County Tax Tax Tax Tax Tax City Extension Extension Extension Extension Extension Special Rates % Rates % Rates % Rates % Rates % School 60.414 60.111 52.211 52.004 53.820 County 37.454 37.270 35.515 38.386 40.994 City 15.282 14.394 13.745 14.081 14.890 Special 5.592 6.135 5.894 6.718 7.788 Taxing District HRA 0.574 0.543 0.477 487 0.538 TOTAL 119.316% 118.453% 107.842% 111.676% 118.030% 281/Robbinsdale School 67.197 ifzzs4/3 Wayzata 63.757 65.350 School 60.414 60.111 52.211 52.004 53.820 County 37.454 37.270 35.515 38.386 40.994 City 15.282 14.394 13.745 14.081 14.890 Special 7.924 7.668 7.213 7.378 8.610 Taxing District District HRA 0.574 0.543 0.477 0.487 HRA 0.574 0.543 0.477 0.487 0.538 TOTAL 121.648% 119.986% 109.161% 112.336% 118.855 281/Robbinsdale School 67.197 64.762 63.757 65.350 47.716 County 37.454 37.270 35.515 38.386 40.994 City 15.282 14.394 13.745 14.081 14.890 Special 5.592 6.135 5.894 6.718 7.788 Taxing District HRA 0.574 0.543 0.477 0.487 0.538 TOTAL 126.099% 123.104% 119.388% 125.022% 111.926 279/Osseo School 70.142 67.155 62.666 56.386 54.337 County 37.454 37.270 35.515 38.385 40.994 City 15.282 14.394 13.745 14.081 14.890 Special 5.592 6.135 5.894 6.718 7.788 Taxing 6.135 5.894 6.718 7.788 Taxing District District HRA 0.574 0.543 0.477 0.487 0.538 TOTAL 129.044% 125.497% 118.297% 116.058% 118.547 School Market Value Rates, City Market Value Rates, Solid Waste Market Value Rates and the Education Credit are not figured into the Tax Capacity Rate Breakdown. 270/Hopkins School 75.076 71.182 61.884 61.063 58.941 County 37.454 32.270 35.515 38.385 40.994 City 15.282 14.394 13.745 14.081 14.890 Special 5.592 6.135 5.894 6.718 7.788 Taxing District HRA 0.574 0.543 0.477 0.487 0.538 TOTAL 133.978% 129.524% 117.515% 120.735% 123.15111 School Market Value Rates, City Market Value Rates, Solid Waste Market Value Rates and the Education Credit are not figured into the Tax Capacity Rate Breakdown. CITY OF PLYMOUTH 1999 DISTRIBUTION OF THE TAX DOLLAR WAYZATA SCHOOL DISTRICT 284 TAX EXTENSION RATES SCHOOL DISTRICT HENNEPIN COUNTY CITY OF PLYMOUTH SPECIAL TAXING DISTRICTS HRA TOTAL TAX EXTENSION RATE 53.82 40.994 14.89 7.788 0.538 PIE CHART DOES NOT INCLUDE ADDITIONAL MARKET VALUE RATES DOES NOT INCLUDE STORM SEWER IMPROVEMENT DISTRICTS OR WATERSHED DIVIDES 6% SPECIAL 0% HRA TAXIN DI TS' 13% CITY OF PLYMOUT 46% WAYZATA SCHOOL 35% HENNEPIN DISTRICT COUNTY CITY OF PLYMOUTH 1999 DISTRIBUTION OF THE TAX DOLLAR ROBBINSDALE SCHOOL DISTRICT 281 TAX EXTENSION RATES SCHOOL DISTRICT HENNEPIN COUNTY CITY OF PLYMOUTH SPECIAL TAXING DISTRICTS HRA TOTAL TAX EXTENSION RATE 47.716 40.994 14.89 7.788 0.538 PIE CHART DOES NOT INCLUDE ADDITIONAL MARKET VALUE RATES DOES NOT INCLUDE STORM SEWER IMPROVEMENT DISTRICTS OR WATERSHED DIVIDES 7% SPECIAL 0% HRA TAXIN DI CTS .' r I 13% CITY O PLYMOU 43% ROBBINSDALE SCHOOL DISTRICT 37% HENNEPIN COUNTY CITY OF PLYMOUTH 1999 DISTRIBUTION OF THE TAX DOLLAR OSSEO SCHOOL DISTRICT 279 TAX EXTENSION RATES SCHOOL DISTRICT HENNEPIN COUNTY CITY OF PLYMOUTH SPECIAL TAXING DISTRICTS HRA TOTAL TAX EXTENSION RATE 54.337 40.994 14.89 7.788 0.538 PIE CHART DOES NOT INCLUDE ADDITIONAL MARKET VALUE RATES DOES NOT INCLUDE STORM SEWER IMPROVEMENT DISTRICTS OR WATERSHED DIVIDES CITY OF PLYMOUTH 1999 DISTRIBUTION OF THE TAX DOLLAR HOPKINS SCHOOL DISTRICT 270 TAX EXTENSION RATES SCHOOL DISTRICT HENNEPIN COUNTY CITY OF PLYMOUTH SPECIAL TAXING DISTRICTS HRA TAX EXTENSION RATE 58.941 40.994 14.89 7.788 0.538 PIE CHART DOES NOT INCLUDE ADDITIONAL MARKET VALUE RATES DOES NOT INCLUDE STORM SEWER IMPROVEMENT DISTRICTS OR WATERSHED DIVIDES 6% SPECIAL 0% HRA TAXIN DI CTAS„; 13% CITY OF PLYMOUTH 48% HOPKINS SCHOOL DISTRICT 33% HENNEPIN COUNTY Cr[ rt N n n 00 en ti ry p M N t, - i- p V .0 rq 00 ' M C, M 06 06M 000 O ti C q O C V V7 00 M Op00MN ri er"er v"•a: y b N h N in 00 000 = ti N 00 C7" ti C06, en 00 v l 00 00 00 en M'a M p 00 Q C, Q O\ rn Q C) d . . N N n000 'ba 7 V M ptn t M •ef NMy N OHO^ M N ao ti N N N QCZ . U C,3, d ti b of o 00N M a ti ti v M p b" n N CN ON et O 00 Cl! 00 6 of .-, r.; eFMNMMMM y{ 00 Rn o0 0, o zeon,Op In p Mtoo, NC4 N in Q, M 000 M N M NM M M M (en V y b N h N in 00 000 = ti N 00 C7" i vN G 00 rl v l 00 00 00 M'a M p 00 Q C, Q O\ 1999 PLYMOUTH Real Estate Taxes on Commercial and Industrial Property Example rate is for School District 284, Sewer District # 4 & Watershed District # 0. Tax Rates Local Rate 118.0300% Fiscal Disparities or Area Wide Rate 157.3730% Market Value Rates (School & City) 0.2370% County Solid Waste Fee 0.0190% City Percentage of Fiscal Disparity 33.5494% Procedures for calculation of tax capacity and tax. Estimated Market Value (EMV) X 3.50% = Tax Capacity Tax Capacity Tax Capacity Estimated Market Value x 0.664506 x 0.335494 x 0.0025604 Local Tax Capacity = Area Wide or Fiscal Disparity Rate = Market & Solid Waste Fee Tax x 1.1803 x 1.57373 Local Tax Capacity = Fiscal Disparity Tax Local Tax + Fiscal Disparity Tax + Market Value Tax + Solid Waste Fee = Total Tax Payable Total Tax / EMV = Effective Tax Rate EXAMPLE: Commercial or Industrial Building with an EMV of $1,000,000 1.000,000 EMV x 3.50% _ $35,000 Tax Capacity 35,000 Tax Capacity x 66.4506% x 23,258 Local Tax Cap. _ x 118.0300% Local Tax Rate x 27,451 Local Tax = 35,000 Tax Capacity 33.5494% 11,742 Area Wide Tax Cap. 157.3730% Area Wide Tax Rate 18,479 Fiscal Disparity Tax 1,000,000 Estimated Market Value x 0.0025604 Market Rates & Waste Fee 2,560 27,451 Local Tax + $18,479 Area Wide + $2,560 Market & Waste Fee = $48,490 Total Payable Tax Total Tax Effective Tax Rate 4.8491% Note: Commercial & Industrial property owners may qualify for a reduced tax capacity rate on the first 150,000 of market value Qualifying Property: 1 st $150,000 EMV x 2.45% Remainder EMV x 3.50% Tax Capacity wrkshts\5148\taxchart\99chart Commercial and Industrial Effective Tax Rates c oo st,Q"00}t A,rsaxs r0iie50 000r .o ,,.a., . :. s C„ REFERREDLASgS` onwQyalifyiing 270 1 3.4190% 4.8327% 279 3&4 3.4427% 4.8242% 281 1 & 4 3.3461% 4.6814% 284 4 3.4711% 4.8490% 284 1 &2 W.S. #3 3.4846% 4.8682% uryAPaeEffectiv e"I aRatest,.' W„ NOTE: On "T"Property Type, the building value is multiplied by the "T Property Type rate and the land multiplied by the "A" Property Type mrope,yp TProperty GLH PROPERT1(, 15 ps c't KTYPE f -TypEA" 270 1 3.199% 3.076% 1.352% 279 3&4 3.183% 3.064% 1.405% 281 1 & 4 2.832% 2.917% 1.350% 284 4 3.207% 3.089% 1.436% 284 1 &2 W. S. #31 3.227% 1 3.109% 1.445% NOTE: Vacant commercial\industrial land (LC, LI) have same tax rate as improved properties. School districts 270, 279, 281 & 284 have additional market value rate included in tax rate. Solid waste management fee is included in all rates (applied against market value). taxrchart%99pcieef.WKi PAGE H4 STAR TRIBUNE Homes Risinentrymievel SEPTEMBER 19.1998 prices pinch buj Shrinking s upply.. is more, settle for less By Neal Gendler Star Tribune Staff Writer forcing people than. planned, The laws of supply and demand are catching up to first-time home buyers. Low interest rates, a strong economy and a tight rental market have propelled hordes of first -timers into the arms of real-estate agents, fueling what appears likely to be a third consecutive record year for home sales. But the frenzy that has made lower- priced homes the fastest -selling segment of the market has begun to turn against those hungering for them: A short sup- ply all year has driven up prices, 'and agents say some first-time buyers are having to spend more'or settle for less than they planned. Some have to leave . the market until they can improve their financial picture. If enough first-time buyers put their' plans on hold, the red-hot.market could start to cool. I work with a lot of first-time buyers, and it is becoming tougher to find houses for them," said John Anderson of Twin Oaks Realty in Crystal. "The big thing I tend to tell people in this situa- tion is 'patience, patience, patience' — patience to find the right house, or to wait and save more money and pay off more debt so you can qualify to buy f more." Anderson, president of the Minne- apolis Area Association of Realtors, sfiid that prices for entry-level. homes have increased more than prices for larger homes. Demand for "starter houses" has made full -price offers and multiple of- fers common and has helped boost the median price of sales closed through August by 6.1 percent from the year-ago eight-month period. to pay or wait Steve Archer, a Coldwell Banker Bur net agent who specializes in the south' east corner of Minneapolis, said he b'64 lieves the price increase in the entry- level end of the market to be about 10 percent. One result is a boost . in'the price range for most of the houses he ; sells. It used to be under $100,000, -WA7- now it's probably under $120,000 to 130,000," said Archer, who works from Burnet's Minneapolis South office:" There isn't -hardly anything undei 80,000 for sale where I sell. It used to be, 60s and 70s, but they .don't exist any'. more."i ' Cathy Martini-Berzins, an agenttig.;;a Edina Realty's Plymouth office, estimat= >' ed that "60 percent of my business isdn4 the $90,000 to $120,000 bracket" and '.66 to 70 percent of her business is first-time1 buyers. Prices in that market have "deft= nitely appreciated because of low inter- est rates and lack of availability." Bidding wars boost prices Although appreciation is not uniforrii across the metro area, both average and median sale prices in the Twin Cities area were up 6.1 percent from a year earlier. The average sale price through. August was $141,300, compared with 133,200 for the first eight months of 19%jj.Wir it i'Z • H ingful for entry-level buyers, because it's z : the point at which half are above and.i,' half are below; last month it was' `- 125,000, compared with $118,000 in`j August 1997, and for the year it has risen to $121,000 from $111,000 though Au- gust 1997. Realtors say that the rise in the medi- an price has been a result of frequent sale of lower-priced homes at or above list price. There's no question that the buyers are paying the price for the demand for entry-level homes," said Todd Grill, a , RE/MAX Results agent and former presi- dent of the Minnesota Association of.: Realtors. "I think the prices on a lot of', these homes are out of whack, but the:.' interest rates keep driving this demand." Realtors say the lower rates and re- sulting lower monthly mortgage pay- ments attract renters who have good - jobs and are paying rents that have crept: higher than payments on a small house. There are more first-time buyers and. they can afford to pay more," Archer.. said. "It's the law of supply and demand If you have three people bidding for a'`-; house, the price is going to go up. Multi pie offers used to be fairly rare, but iii.: n; the last couple of years they're been; fairly commonplace." The result is a problem finding; houses for fust -time buyers, especially:'. those with lower incomes. Anderson said he's working with a` young couple qualified to buy a home hil the upper $70,000s. "They want a .twol-z bedroom basic starter house, and theres. is nothing out there," he said. "What iso, out there needs a lot of work, or is inl, questionable condition. I rememberjI''l when for upper 70s you could get a nice little starter house. Now it's mid to up; per 80s." ror example, he knows of a Robbins" dale listing at $71,900 "for a 720 -square foot, two-bedroom bungalow that needs?; work. It has a 25 -year-old roof, 60 -amp': outdated electrical service, an unfin.( ished basement, a single -car garage." Considerable numbers of houses are available in Minneapolis' Camden' neighborhood, he said, and Martini-Ber- zins said she's sold six there in the past''.Isixmonthseventhoughit's an area where she normally doesn't work. "But if - you want to get upper Camden, close to .1 Brooklyn Center, close to Memorial. Drive, it gets pretty thin," she said. Anderson said that the Near North community has many large, older homes, but some buyers express con- cerns about the neighborhoods. "In mr opinion, for value, the near North Side is, great — great buys and great homes," he said. In all areas, there are fewer houses available and prices are up," he said. After two record years, many houses have been sold so fewer are on the market, "and the prices have gone up, so what used to be a starter home now is too expensive." Buyers settle for less Anderson said the rise in starter- wtii ea wi,w Lv.r rur wi f the market, because the houses they now can afford to buy need improve-'• ments they can't afford. What you're seeing ... is kitchens that date from the 1920s, bathrooms that haven't been updated, kitchen floors only half there, windows in terrible con- dition. Basically, a lot of properties in this price range today are in very tough condition. I take out first-time home buyers who are scraping together every penny they can to buy a house and they'relookinginthe70sandlow80s — they're not going to be able to get in there and renovate," he said. "These couples aren't looking for the Taj Mahal but just a clean, decent house that they can move .j into and not put in a lot of money immediately." But in the present market, "their al- j ternatives are to buy a house that needs work — which they lack money to do-*' or move into a higher price range where they don't need to do the work immedi - ately but maybe they can't afford it.". That means a number of buyers just have to wait, save and pay off debt to qualify to buy a more -expensive house". ' Others just have to lower their exp66. itations. In my opinion; the average.fa torr' worker's income isn't keeping up _ wllh growth in house prices," Anderson said.:: Many buyers are "spending a little' bW more than they planned and they airy. more apt to look at less house than they,: wanted," he said. Some people buy' houses that aren't as nice as .the units they've been renting. A lot of times I have a buyer give me a need list and a wish list, and they end up giving up a good portion of their wish list because of price," Martini-Berzins said. And when they see a house they want, they'd better decide quickly; agents have said all year that a good buy in a lower price range isn't likely to sit around, sometimes not even overnight. As one agent put it: If you decide to wait and "sleep on it," it's gone. Lots of buyers, few sellers Whether entry-level houses will con- tinue to be snapped up if prices keep rising is another matter. Although closed sales through August were 18.9 percent ahead of the first eight months of 1997, Realtors have complained all year of low inventory in many price ranges. In gen-'j_ eral, the lower the price, the shorter in Fsupply, but last month, Regional Multi- ple Listing Service data showed only 16,672 listings on the market, down 26.8 percent from 22,761 in August 1997. Entry-level buyers have been credited with igniting the torrid pace of sales.'. because people selling starter homes typically move up to larger homes. In addition, the lower the price, the greater, the pool of potential buyers. Low interest rates cut two ways: They encourage people to enter the market a and enable them to buy more -expensive ' homes than if rates were higher, but the numbers of buyers creates bidding wars' and pushes up prices, driving some buy ers back out of the market. Archer said his business already is a little slower than normal, but because of insufficient listings. "It. seems like there's` plenty of buyers," he said, but a lot of . people have refinanced with low interest ' rates and have taken [homes] out of the <= market," he said. The level of activity' of the past few years also is a drag on his business because "there's just so many transactions out there." The rise in prices "will affect the mail' ket if interest rates were to go up," Ar- cher said. Rising rates and rising prices would get beyond many first -timer's fi- nances "because I don't see their in-l.. comes going up that fast." But, he said, 1. you probably can see a fair amount of increase before that will happen."; Anderson expressed an even longer-' itermview. I' think that every business goes : j through trends up and down," he said. We are in a high market, a great market right now, but like every other business out there, we will dip at some point in the future." Martini-Berzins sees the market hit- ting the brakes if interest rates were to shoot back into double digits. She said 1:' that viewed on a national basis, prices in the Twin Cities area are modest. People are spoiled here," she said. "I see a lot of first-time buyers coming right out of college.... You definitely do not see that on the East and West coasts," where prices are much higher. "I have relatives out East who are in their 40s and still don't own homes." WE J..i A yy o3 sc3'c 3co ooDs a. cs0 c E c co `° c L e a E N o o> n E cca N c 3 c L" n^ s ^ , yp x o L •> ca C L o 00 Ut-- C S_ y U 'E Q C C C= 3 0 C c O U O x ... 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O ,U N O c. O 'p O •fl ca 0> N C c fl O ca a ca ca O Z .c d rO U C L '_ ' C ... B. C R > U C , T C cCG _C 00 c3 0 L R c a3i aci c `- oc C. G E o ECis y u` o oco c`> 0. 3 a Q .cc z a E N C E cya n O 3 0. -- o c E n M N > E caenEy '' n- ami E., H or, 0 y° .E R Ems cs U U E_ 4 u > v N Q .0 o 0 3 a a° o o c u H >% 00 'w. c a°° ° ' E 3 cf s e aVUt N O N . O c0 _ .D t!') C cd -5s O v 3 3 i._ N 5 N y' °' E O C r 0 n d 3 U U _c. '-p-0-0 O •CciiQOLUC0% N ca 3 c U c.. —, 0o C v U 0 C t4u fl dZ o c c H o Q c 0a 0.? E u E E ca a ca E.c E v v v.E Ern vs 3 on.E °c .5 n u v 0a .oE70cUUCyU ca 7 O as u._ n.cacic acia 'E C o V c0 M u 0 0 0 •C w t 'fl U, C y€ O U U M .0 •C O u.C 0 a. d O yE vn•u CI - enCrv I --- o u H 0C` c o o ca -Govac Ca E E E0% u °' `° ccp tnE 0 0V a• yoL N o k• 0IncaRO0 o N 2 O a.0 °GLs Z ••• „c 0 '9 Z O N 'p y' 0 w 'fl U ca .0 3 .v .0 F l y 0 0 e` 0 o Q\ 0 O u E O C >w..c 3 mss= 3 3 cci `o E O C .E N C E.° y o U 0i E acg; 3 dvi C-4 ba C p C 0 y ..+ . O. 0 R N yr N R 0 0 0 Z C ap d OIn Do% y 0ca pU c? 0 .> p f. o w o C 0 N CA. aci.`°c c_.E E ua c u u.E o E` a ov rnE'$0v °ZuLonu.0hu°'o' ova.oa a ° cva E c- c 0 E s E a 2 u o CO U„ C c'..' C U y C 0 o U O V U` O ca O C U y .UC Z 0 U U y v• • H O 0 v1 N o a p O U O L o J 7 >. U C L s$U % N o 6:E v p c E c.Ucn crn c c N E E v- 0 0 u o0,03HEUUto •E 6 cf - U U N L a cab j- 0 c The boom in Twin Cities housing prices isn't letting up, a sign that 1999 could look a lot like 1998 and affordable homes will continue to be scarce. Home-.nr-mico sjNukst ep goming up.... By Jim Buchta During the fourth quarter Star Tribune Staff Writer of 1998, the median home sale price in the Twin Cities Home price increases rose 9.7 percent from the pre - blasted well beyond the rate vious year, from $118,700 to of inflation in the Twin Cities 130,200. That's substantially last year. If the :price trend above the fourth-quarter in- - continues, 1999 should be.a flation rate of 2.1 percent: sellers' market and a pot n- : ;The --'In. edian , is 'the mid- tia4, frustrating time for eo-' . for dble. ' point'at wh1ch half the homes for less sell'forplesearchingafforsellarid;half homes. ; more.. In 1998, there was • ari `8.1 I think traditionally what percent increase in the midi- you see is 3, `4 and5 percent an sale price of single-family increases on a yearly basis," . homes in the Twin Cities.met- said John Anderson, a sales ropolitan :' area. The median.. agent with Twin Oaks Realty in price was $118,400. in 1.997 Crystal and the I998 president and rose tp $128,000 in 1998, of the Minrieapolis Area Asso- according to a report relgased ciation of Realtors. "This is Wednesday by the National one -and -a -half times what you Association of Realtors. .• normally have. It was an extra - Sale prices in the Twin Cit- ' ordinary year in price and vol- ies area grew so dramatically ume." last year that they outpaced even the best -performing re- HOMES continues on A16 gi.on in the country: the Mid- west, which posted a fourth- ALSO INSIDE quarter median sale price of Attorney Generat Hatch will114,400, a 7.1 percent in- crease from the previous year. push mortgage legislation. B1 Home prices rising The median sales price of existing single-family homes over the past year has risen most rapidly in the Midwest The median 1998 fourth•quarter price is Northeast shown in parentheses. +2.99'0 148,200 JL /o L6ii& U4,40Q)- r, es Wits—t,q In the Twin Cities.. The annual median home price for 1998 rose to $128,000. 4_4),: '• a. w w x: z The median home price for the fourth 96 '97 '98 quarter of 1998 was $130,200. ABCNEWS.com : Housing Starts Soar G_ O Kids GO Family GO Money GO, Sports GO Home c About INFOSEEK SEARCH (-' ABCNEWS n Web Wa Network i Sign I Free E- 7 - ABC BWn$ HOME N ENS SUMMARY U.S. WORLD IIP' -BUSINESS Small Business Personal Finance Market Details The Sectors Mutual Funds Raw News TECHNOLOGY SCIENCE 0. HEALTH&LIVING TRAVEL ESPN SPORTS IP ENTERTAINMENT WEATHER.com REFERENCE LOCAL ABCNEWS SHOWS BUSINESS HEADLINES SEARCH S&P PERSONAL WEALTH MON EYSC_OPE ABC.com 110 -THE CENTURY EMAIL ABCNEWS.com SEND PAGE TO A FRIEND mail SomEfihing fior EvE yBody . Housing Starts Soar New Year Begins With A Banti REUTERS 4 WAS H INGTON,Jan. 17— Construction starts of new homes soared in January to their highest level in more than a decade{ the Commerce Department said on Wednesday, in a report suggesting the U.S. economy lost none -6f its steam at the start of the year. Total starts jumped 3.8 percent in January to a seasonally adjusted annual rate of 1.804 million, fol! wing an upwardly revised 5.1 percent rise to 1.738 million in December. ! January's building rate was the highest since 1.833 million recorded in December of 1986. Evidence of Strong Economy The economy is growing very rapidly this is just the latest piece of , evidence," said David Blitzer, chief economist at Standard & Poor's ih New York. The gain was far above analysts' expectations of a 1.68 million annual rate for January starts and the data's release caused a momentary dib in inflation -sensitive bond prices and a slight firming in the value of theldollar. Just as in the previous montk, the January housing start spurt was concentrated in apartment, where starts shot ahead at a 13.9 percent rate to 410,000. That came after an even more spectacular 29.0 percent jump in.. December to 360,000 units. Starts on single-family homes rose 1.2 percent to 1.394 million in January, their highest level since February 1984, SUMMARY January housing starts soared; industrial production was unchanged. STOCKS& FUNDS 0 By Name O By Symbol GET QUOTE The economy is growing very rapidly this is just the latest piece of evidence." David Blltzer, chief economist at Standard & Pooes In New York Page 1 of 2 http://abcnews.go.com/sections/business/DailyNews/economv990217.html 2/17/99 ABCNEWS.com : Housing Starts Soar •.i Page 2 of 2 TOOL3 AND t •. HELPERS following a modest 0.2 percenf gain in December to 1.378 million. Starts Strongest in South Housing starts were strongest in the South, where they rose 22.3 percent, while the West saw a 3.7 percent gain. But in the Midwest, starts were*down 25.3 percent, and they fell 3.2 percent in the Northeast. The brisk overall building pace showed no sign of slowing down ,. anytime soon. The department said new applications for building permits, an indicator of future housing starts, were up 2.8 percent in January to 1.777 million, following a 4.4 percent rise in December to a total of 1.729 million. `3t Industrial Production Unchanged Also, the Federal Reserve said',today that U.S. industrial production was unchanged in January despite _a slight increase in factory output. U.S. mines, factories and utilities operated at 80.5 percent of maximum capacity — the weakest rate since 80.4 percent in September 1992 — after running at 80.8 in December. Overall output was steady following a 0.2 percent gain in December,:the Fed said. a Copyright 1999 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Search for more on: economy Copyright ©1999 ABC News Internet Ventures: Alf rights reserved. This material may not be published, broadcast, rewritten or redistributed In any form. Please click here for legal restrictions and terms of use applicable to this site. Use of this site signifies your agreement to the terms of use. i-tttp://abcnews.go.com/sections/business/DailyNews/economv990217.html 2/17/x4 1421 E. Wayzata Boulevard Tel (612) 473-7000 Fax (612) 473-3127 www.rogerfazendin.com Wayzata, Minnesota 55391 We thought you may be interested in Dat: Fazendin's "State of the Real Estate Market': STATE OF THE RESIDENTIAL REAL ESTATE MARKET 1998 was a spectacular year for residential real estate sales in the Minneapolis/St. Paul Metropolitan area. The number. of saloc increased 24.8% from 1997 to 1998. The value of the average home increased from $133,800 to $143,500 or by 7.2% over 1997. This was driven by a very robust economy and by mortgage rates that hovered around and under 7%. Minnesota statewide appreciated approximately 5.3% over the past year which was the 10th highest state appreciation in the U. S. As this letter is being written, a very unique situation exists. The number of listings currently on the market is VERY low. There are clearly far more buyers than sellers right now. For the past six months the homes that ROGER FAZENDIN REALTORS sold averaged 98% or more of the listed price. In fact two of the months had averages of more than 100% of the listed price. While we see this acute inventory problem as Probably short term, we do see it having a strong impact on appreciation. Likely appreciation in 1999 could be in the 9 to 10% range. As has been the case for years, the condition of a home is very important to maximize value. It is not wise to "defer" maintenance for too long. ROGER FAZENDIN REALTORS will be entering it's 34th year in business in 1999. Much of the landscape in the residential brokerage business has changed over the years and we are very proud of the fact that we are now the largest nonfranchise, family owned residential real estate company in the state. By virtue of our size, experience and resources, we provide the most professional and personal service in the industry. If your plans for 1999 involve a housing change we would be honored to be of service. Now in our 10th year as REALTORS, the. Team continues to be among the very top in the real estate industry. As longtime residents of Plymouth, we are well-known inthePlymouthcommunity... our 3 children have attended Wayzata schools, we shop here, worship here, and are involved in Plymouth/Wayzata activities. We actively promote the Plymouth area to our buyers ...the majority of our real estate transactions are in Plymouth. Ifyou are considering selling your home or thinking about a new one, please call its ...for unparalleled service and proven results! Best wishes for 1999! Members RELO —The Premier Real Estate Network Christie's Great Estates International SATURDAY, APRIL 17.1999 Homes for. -.-:.1 sale get harder to find Listings drop 26% :, y and prices rise 8.2% By Neal Gendler Star Tribune Staffj`Writer The shortage of homes for sale'-' in the Twin Cities. area is.pinch= ing ` ' tighter. Compared with: March 1998, the number of list ,- V ings last month was down 26 per; cent and the median price;; " closed sales was up 8.2 percent. . While 13,014 homes were fo"r`2• sale last month in the Regional Multiple Listing Service, that washdownfrom17,671 a year ago. The number of new listings declined;3 6.5 percent for the month andj19.8 percent for the year, accord= ing to data released Friday by thed, Minneapolis Area Association oV_44' Realtors. 4 $A As low rental vacancies and interest rates continue to gener- ate first-time buyers, demand for entry-level homes exceeds sup- ply, leading to offers of full price or more. This has helped raise the median sales price — the. point with half above and half. below — to $128,700, up from. 119,000 a year ago. In March 1997 it was $111,500. The shortage of listings in Jan- uary and February led to a 0.4 percent drop in closed residential sales: 3,367, compared with 3,381 in March 1998, said association board member John Anderson of Twin Oaks Realty. For the quar- ter, however, closed sales totaled 8,835, up 16.6 percent from 7,850 in the year-earlier period SWMAGE cofi*wes on Doc Listings expected 6 grow. SHORTAGE from D1 YI would be sellers wairg h ora new ome to moveinto tClosee sales represent transac' an Edina' Realty agent Realto ,w ons be 45 to 60 days. earlier, , have aid such waittn and rg Y §..... $ b thel>!,three-month increase,sho'rge of lomes _foFseller babi resulted from.purchase tbuy- is a g va ng'the sho ig .eemens'signed iri-the unu5u oflistiags e', .' aty active,. weeks of 1998 f } ', a`s A ibt of pgple relocked IF Purchase agreements ;signed `-theft jhotYses :because whey # last month.totaled 5,389,;up.6.7 nancedinthelastl8 nonths,"; percent fro"m 5,050 a year earlier, : said. Anderson. added that mafiyaltitough`'such "sales pending" pe6pwwh6 refinanced used ettjj-' were down 4.4 percent for -the uity to remodel 'o'r'add on, f` Sd1 fie nter. `rhe local real estate they're very unlikely to move. .. T ket normally peaks in April. After three consecutive recbr- , ssociation President Kevin years, Twin Cities Realtors m4hi said he expects listings to a year of strong,,but not record, taow, but perhaps less than nor- , sales. The National Association of tail. "We've got a lot of people Realtors predicts sales to be 0.8 wl%o are ready to put their homes percent short of 1998's U.S. on the mark hey find,a ,cord..• , ta; new home fo come to;" said Ries; ,