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Anoka County <br />City of Lino Lakes <br />We are aware that due to the time frames we are required to work within, it sometimes <br />seems as though the assessor's estimated market value does not represent the market. It is <br />lower than is should be during times of inflation and higher than it should be in times of <br />deflation. The following chart illustrates the relationship between assessed values and actual <br />sale prices and how the assessor's market values have been following the changes in the <br />open market. <br />Note: The Median Assessor's Estimated Market Value represents the homes that are in the sales study. <br />Median Assessed Value as it Relates to Median Sale Price <br />(assessment year based on closed sales from the prior Oct thru Sep, for tax payable the following year) <br />Median Sale Price / Assessor's Estimated Market Value <br />8235,000 <br />$230,000 <br />$225,000 <br />$220,000 <br />$215,000 <br />$210,000 <br />$205,000 <br />$200,000 <br />$195,000 <br />$190,000 <br />$185,000 <br />$180,000 <br />$175,000 <br />2004 2005 2006 2007 2008 2009 2010 2011 <br />Tax Payable Year <br />+ Median Sale Price f Median Assessor's Estimated Market Value <br />As you can see, there is a point in time where the relationship between the assessor's values <br />and the sales prices intersect. It is at that point in time that the market took a large downward <br />turn. The following year, in response to that market condition, the assessor's values were <br />reduced to reflect that trend. And we have responded with lower assessed values each year <br />since as the market continues to decline. <br />One last important point to make note of is that the assessment process is completed before <br />the budgeting process begins. Assessors do not adjust values in order to increase revenue. <br />There is little correlation between changes in assessments due to market changes and how <br />the resulting real estate tax changes. When we adjust assessments due to the market going <br />up or down, all properties are adjusted. The only time that an adjustment in an assessor's <br />estimated market value will have an impact on the increase or decrease in tax is if the <br />change in value is due to value added for new construction or value removed due to <br />demolition /destruction of an improvement. <br />5 <br />