Nobody wants taxes to go up, but homeowners are happy to know their investment increased in value. It’s possible that most Montana homeowners will be satisfied on both counts when statewide reappraisal notices are mailed out next summer.
Every six years the Montana Department of Revenue is required by law to reappraise the value of all property in the state. One step in that massive reappraisal process is to look at what homes have sold for over the past six years. The department’s research shows little change on average statewide, but a positive trend for the Billings region.
Sale prices rising
In Yellowstone County, the median price of a home that sold in 2013 was 19.97 percent higher than in 2008. Back then the median was $182,550. In 2013, the median was $219,000, which means that half the homes sold that year for more than $219,000 and half sold for less.
Statewide, the DOR’s preliminary numbers show a change of plus or minus 5 percent to 10 percent, as previously reported by The Gazette State Bureau. In the previous reappraisal cycle, the statewide change was an increase in sales prices of 55 percent.
These numbers point to something even more important: Billings' economy has recovered and is thriving. Better home sales suggest the economy is growing, good jobs are coming to the area and Yellowstone county continues to be a place where businesses want to do more business. Along with jobs and homes will certainly come more retail, more recreational and more cultural diversity, which are by-products of a healthy, thriving, robust community.
The current DOR estimate takes into account drops and gains. For example, the median sale price dropped by 15.56 percent in Ravalli County and dropped 3.32 percent in Flathead County. Meanwhile, median sale price increased 7.53 percent in Gallatin County, 5.6 percent in Missoula County, 11.6 percent in Cascade County and 13.56 percent in Lewis and Clark County.
In Richland County, on the western edge of the Bakken boom, the median home sale price last year was $250,000 – 212 percent more than it was in 2008. Over the past six years Richland County’ median home sale priced fluctuated from $80,000 to $130,000, then $67,500, then $180,000, then $222,500 and finally to $250,000 in 2013.
Generally, Eastern Montana counties posted increases in home values over the past six years, according to DOR data. However, the median sale price dropped about 14 percent in Carbon County where the median last year was $200,000. In neighboring Stillwater County, the median increased nearly 19 percent over the past six years to $195,000 in 2013.
In small population counties where only one or two homes sold, the median sale price can vary wildly from year to year. Thus, the figure for one year doesn’t provide much information on trends, according to Montana Department of Revenue Director Mike Kadas.
Kadas said the department will provide the 2015 Legislature with “a very good estimate of what the change will be on a county level.” The Legislature usually tinkers with the property tax formula to prevent large overall increases in taxes.
Most local government spending does not increase with increases in taxable value anyway. State law limits the amount public schools can spend. Levies to pay off such things as bonds for construction of Billings schools, the public library and ballpark don’t increase with taxable value.
The Billings market missed out on the housing bubble. When the bubble burst in 2008, our market didn’t crash, it slowed down. Now it’s speeding up, giving residents a healthy sign that our city has overcome the effects of the Great Recession and is moving forward at a pace that most other cities of 100,000 can only envy.