Co. Appraiser: Ellis County 2021 property valuations to jump
Most Ellis County property owners will see a jump in the county’s 2021 valuation of their real estate, whether commercial, residential or agriculture.
That may or may not translate to residents paying higher property taxes, something that won’t be known until later this year, said Ellis County Appraiser Lisa Ree.
“That’s hard to say, we won’t know until all the taxing entities put in their budgets, and the clerk calculates the mill levy,” Ree said. “Typically the clerk starts working on the mill levy in October.”
Ree broke the news to the Ellis County commissioners at their regular Monday meeting at the Ellis County Administrative Center, 718 Main.
She said she will mail out this year’s real estate valuation statements on March 15, and warned people to expect a jump.
“Since we have such a big change in our market, I thought it was important to let you and the public know what’s going on,” Ree told the county commissioners.
Fair market value is set as of Jan. 1, she said, based on a number of factors.
In general, Ree said, the majority of Ellis County residential properties is jumping on average 5% to 6%, with some areas 10%, or more.
“There were pockets of town, areas of Hays, that saw larger increases than 10%,” Ree said. “And that’s based on how homes are selling in that area.”
Valuations on commercial property are going up on average 5%, she said.
The Kansas Department of Revenue division of property valuation conducts a ratio study annually for every county in the state, she said.
“The ratio study looks at open market sales of properties in Ellis County and compares the sale price to our value,” Ree said. “We are considered compliant if our values are within plus or minus 6% of the sale price. That allows a range of 90% to 110% of the appraised value when compared to sale price.”
The mill levy is the tax rate applied to the assessed value. One mill is equal to one dollar per $1,000 of assessed value, according to Ellis County’s official web site.
Department heads and elected officials will present their budget requests to the commission in May, with outside agencies presenting in June.
In detailing the situation Monday for the commission, Ree said that for residential properties from 2009 to 2015, on average, Ellis County’s appraised values were within at least 5% of the sale price.
“In 2016, we were starting to see the effect the drop in oil prices was having on the local real estate market,” she said. “Although we were consciously holding values down because of that, on average, we were still just slightly over 100%. So still within the state’s guidelines.”
The state hasn’t completed its ratio study yet for 2020.
But in looking at the 2020 residential sales compared to Ellis County’s 2020 values, Ree said, Ellis County’s appraised values on average are 94% of sale price.
“So, why is that? Part of the reason could be attributed to record low mortgage interest rates,” Ree said. “According to a couple local banks, the average residential mortgage rate for the last four months ranges from 2.5% to 3.375% for a 30-year fixed loan. The lowest rate for a 15-year mortgage was 2.1%.
“As one loan officer stated to me, some of their clients have been able to afford a larger purchase price for a home due to our lower interest rates,” she said.
Another factor is supply and demand.
“Earlier this year I visited with a local real estate realtor and he stated that on that day, there were 35 homes for sale that were on the market in the county, compared to over 150 last year,” said Ree.
That trend continues, she said. She was told by the same agent that homes have been selling for more than the asking price given a housing shortage, she indicated.
In 2019, according to the Hays Multiple Listing Service, 328 homes sold, which was far fewer than the 408 sold in 2020, she said.
Likewise, the average sale price has increased, from $165,419 in 2019, compared to $189,310 in 2020, Ree said.
“All of these factors I mentioned, the low mortgage rates, the low supply of homes for sale, and the higher sale prices of homes, have an affect on that fair market value that we set,” said Ree. “And this will be reflected on our 2021 residential values.”
Unlike most years when she can give an average increase in property value for the year, that’s not the case this year, she said.
The increase depends on factors such as where in the county the house is located, the age, the size, the features of the homes, and what similar homes are selling for, Ree said.
Some areas, especially in Hays, she said, saw values creep up at least 7%, another section was even higher, at least 10%.
“After conversations with other counties and the property valuation department of the state, this residential market situation is not unique to us,” she said. “It is happening in other counties; it is happening all over.”
Because there are fewer commercial than residential properties in the county, there are fewer sales.
In 2020, only 8% of property sales were commercial.
Criteria include whether the location is good for the type of business, if it’s for the buyer’s own use or to lease, and if the building suits the buyer’s needs. Those factors, and lack of sales, make it harder to estimate commercial property values, Ree said.
“Regardless, according to the state study, our commercial values have historically been low,” she said. “So we’re seeing this year that it’s typical to have commercial values increase 5%, 5 to 6%.”
Agricultural land isn’t valued at market value, but at use value, which is set by the state, Ree said.
Previous years have seen large increases in ag land values, she said, but that has leveled off a bit.
“But for 2021, on average, cropland value per acre has decreased slightly,” said Ree. “But pasture land, we’ve seen a significant increase in pasture land values.”
Request a hearing
Anyone who questions their valuation should contact Ree’s office to request a free copy of their property record card, listing all the information the appraiser’s office has collected on their property.
For a home, owners can request a free copy of their comparable sheet showing their house, with some basic characteristics of it, and comparable homes.
Anyone wanting a hearing to dispute their valuation should contact the appraiser’s office by April 14.
Like last year, those hearings won’t be in-person, but rather by phone, she said.
The Appraiser’s Office certifies real and personal property values to the county clerk on June 1.