Nobles County ag land owners see property values rise 30% to 74%

Apr. 25—WORTHINGTON — If you received a property valuation notice earlier this month from Nobles County, you may have experienced some sticker shock by the proposed increases outlined by the county assessor's office.

Last week, Assessor Valerie Ruesch reported to Nobles County commissioners that values on bare agricultural land are rising by 30% to 74% throughout the county in 2023, with ag land owners in Leota Township experiencing the greatest increase in their property's value.

Leota Township had five arm's length agricultural land sales during the reporting period of Oct. 1, 2021 through Sept. 30, 2022. An arm's length sale means the buyer and the seller are not related. Sales to family members are not included in property value determinations.

In those five Leota Township land sales, the buyers paid considerably more for the property than the estimated market value the county had placed on the land. Because of that, Ruesch and her staff were required to increase the value of all other properties in the township to meet state requirements.

In Minnesota, county property valuations must be within 90% to 105% of actual value based on land sales.

Increases were made in land values across all townships in Nobles County, even Lorain Township, which didn't record an arm's length sale during the one-year reporting period. Residents there saw a 30% bump in property value just based on sales in surrounding townships.

"We had 64 good, arm's length sales for bare land (within the timeframe)," Ruesch said. "I've never seen this many."

The highest price paid per bare acre between Oct. 1, 2021 and Sept. 30, 2022 was $15,750 in Ransom Township. Using the Minnesota Department of Revenue's time trend formula, the value of that land increased to $21,061 per acre on the 2024 valuation notice.

While it's still too early to say, it's possible landowners will see another increase on their 2024 valuation notices. Since the last reporting period, a parcel of land in Westside Township sold for $17,250 per acre — the highest ever. That sale, one of 30 that has taken place since Oct. 1, 2022, was in mid-November.

Statewide, Nobles County was among five counties to experience market trend increases on bare agricultural land over 30%. Its applied annual trend is 30.77%, followed by Renville County with 31.56%, Redwood County with 34.42%, Cottonwood County with 38.18% and Meeker County with 39.71%

Owners of bare ag land aren't the only individuals to see stark increases in market values on their property. City property owners also saw bumps, with those located in what is dubbed the "original town" in Worthington seeing some of the largest increases. The original town encompasses the area from several blocks north of Chautauqua Park, and east to the railroad. Seventeen sales were recorded in that section of Worthington during the one-year period.

"They saw a bigger increase in land, and then I had to get up to the (90% to 105% threshold), so their neighborhood factor increased significantly," Ruesch said.

County-wide, there were 240 sales of residential properties. Of those, 159 were in the city of Worthington and 63 were in smaller cities in the county (24 in Adrian, 11 in Brewster, seven in Wilmont, six in Rushmore, five in Ellsworth, four in Round Lake, three each in Dundee and Lismore, and one in Bigelow). Eighteen residential sales were located in rural areas of the county. Ruesch said her beginning ratio median was 75.91%, and she raised values to reach a median ratio of 91.05%.

"Usually I'm more comfortable being within 92% to 94%, but because of all the huge increases in land sales, I've been trying to get within the guidelines of the Department of Revenue," Ruesch said.

There were three apartment sales within the county during the one-year period, and Ruesch said she made minor adjustments to those values. Additionally, there were 16 sales of commercial property county-wide.

"They pretty much saw a land increase," Ruesch said, noting that 14 of the 16 sales took place within Worthington city limits.

Nobles County is not unique with its considerable increases in market values. Ruesch said sales are trending higher nearly statewide — and particularly in southwest Minnesota.

"In our region... Everyone's increases were very similar," Ruesch said.

While Ruesch has fielded some questions at her office already about the valuation notices that were mailed to property owners earlier this month, she anticipates more people will be attending their local board of appeal and equalization meetings this year.

Those meetings began on Monday in Leota Township and will continue through May 4, when residents of the city of Worthington have an opportunity to attend their local appeals meeting at 9 a.m. in the commissioner's room of the Nobles County Government Center.