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LAKE SHORE - "The residential market in outstate Minnesota, specifically Cass County, continues to trend downward slowly with very few instances of rising markets."

Minnesota Department of Revenue made this statement in its annual comment on Cass County's land appraisals for taxes to be collected this year.

Each year, the state holds a board of equalization meeting following the county equal meeting and determines whether they believe the county appraisals are in line with markets. Some years, the state has required the county to raise or lower appraisals in some districts.

This year, as in the last several years, the state found the county's appraisals accurate and required no change.

In its detailed review of county property values, the state report indicates "the residential market is making a slow recovery, but it appears that it will be a few more years before the market starts to resemble the pre-recession housing market."

The counties, by law, cannot use either foreclosed and short-sale properties or properties sold for $1 among family members in setting values for comparable properties.

One factor that affects appraisals people get in preparation to buy or sell a property is that private appraisals are allowed to include foreclosed or short sale properties as comparables when few comparable normal sales are available.[[In-content Ad]]

This tends to drop the value of normally sold properties and makes it more difficult for borrowers to get financing for properties other than those being sold at a discount such as those in foreclosure.

"Foreclosure and bank sales account for an increasing portion of the market. These sales serve as competition for non-distressed properties on and off water, which overall depresses the seasonal recreational market," the state reports.

Lakeshore currently is flat, according to the state, with the exception of some scattered lakes where sales have been stronger such as Gull, Leech, Woman and Winnie, though private appraisals for financing purposes can come in lower than offering prices, thus undervaluing an otherwise non-distressed property.

The state report warns people who do buy and sell properties in this market to be aware of potential frauds such as when someone representing the seller does not submit the best offer to the lender or a middleman buys a property at a low price then immediately resells it at a higher price.

The state warns people to verify that the title or closing company they used does make their mortgage payoff when the property is sold.

One encouraging report for local property sales Assistant County Assessor Penny Vikre reported in an interview Monday is that second quarter foreclosures in Cass County dropped from 40 in 2011 to 26 in 2012.

In Cass, there only are 51 apartment land parcels, with few of those being sold, because there are few apartment vacancies. Some complexes have waiting lists. The vacancy rate is 4 percent, down from 6 to 7 percent 18 months ago.

Low quality retail properties were hit hardest in the recession, according to the state, while high quality retail properties have held steady, allowing owners to maintain rent levels. No Cass districts had six or more commercial property sales, the preferred level to gauge market direction, the state reported.

"While the value of farm land has increased statewide, the number of sales has decreased," according to the state, though "Cass County has trailed and continues to trail the rest of the state."

This is largely because there is less high quality crop production land here. Timber and pasture lands remain flat at best, the state indicates. Agricultural lands here were down .3 percent on 29 sales recorded in 2011, the state reports.

The State Demographic Center recently released another report that sheds some light on one reason property values remain stagnant or in decline here. Cass County's population is estimated to have dropped .6 percent from 2010 to 2011.

Cass County's population increased 24.6 percent between 1990 and 2000, reaching 27,150 in 2000, according to county auditor-treasurer office records. It continued with a 6.6 percent increase from 2000 to 2006 before reversing to a moderate, steady decline.

With fewer people, demand for housing and commercial activity has not increased the last few years.

Cass County Environmental Services (ESD) Director John Ringle presented one encouraging report on new construction this year for the county.

The department has issued 29 percent more zoning permits the first half of this year, compared with 2011, issuing 626 permits so far this year, compared with 486 in 2011.

The planning commission considered 33 percent more variance and conditional use requests than in 2011.

The largest number of land use permits for new buildings or additions and new sewer systems came in the following districts: 27 in Woodrow Township between Hackensack and Longville, 26 in Shingobee Township by Walker, 25 in city of East Gull Lake by Gull Lake and 21 in Crooked Lake Township by Outing.

The board approved Ringle's recommendation to hire Materials Processing Corporation to recycle electronic waste for the county at no cost to the county through July 1, 2015. Cass had advertised for quotes to process electronic waste materials the county collects from residents in a joint offering with Crow Wing and Hubbard Counties.

The 11 bids received ran as high as 30 cents per pound for electronics and $10 each for large televisions.

Materials Processing Corporation will haul away loads each time the county collects 10,000 pounds of electronic waste.

Megan Fitzgerald, summer intern working with ESD, reported 28 people volunteered to have their water wells tested for nitrates in a continuing study involving 558 properties in 14 counties.

None of the wells tested in Cass exceeded the nitrate level deemed safe for consumption, she said, adding that most registered zero. The well with the highest nitrate level in Cass was a 40-year-old shallow well, she said.

Second publication rights after Brainerd Dispatch.

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