The news out of the county appraiser’s office is a mixed bag for the city of Edgerton. Nine out of 10 homes decreased in value between 2009 and 2010, but the average purchase price of existing family homes increased by 12.7 percent.
Overall, the city of Edgerton’s assessed value – which includes the appraised values of all dwellings and commercial properties within the city limits – is $74,942,350, which is about $3 million less than the city’s total value in 2009. In 2008, the city’s appraised value was $80,189,120.
County appraiser Paul Welcome predicted in November that average property values would continue to decrease in 2009 into 2010. Welcome’s full report – released in February – revealed decreasing residential and commercial property values for a second consecutive year. However, Edgerton was one of two Johnson County cities in which the average sales price of existing homes increased.
The average existing single family home in the city sold for $107,268 in 2008. That number jumped to $120,853 last year.
“The county experienced a decrease in the average appraised value of new and existing single family homes by 5.7 percent,” Welcome’s report for the Edgerton City Council reads. “For some unexplained reason, Edgerton and Westwood Hills experienced an increase in the average sale price of single family homes.”
In Gardner, the average sale price decreased by 1 percent. Things were worse in De Soto where the average sale price plummeted 22 percent.
Welcome said he doesn’t have a crystal ball to predict whether local property values have hit bottom.
“I don’t know if anyone knows where we’re at yet and whether we have bottomed out or not,” Welcome said.
According to Edgerton City Administrator David Dillner, there’s always a concern when assessed values drop.
“That means you’re going to have to come up with revenue in the next budget,” Dillner said.
Approximately 40 percent of Edgerton’s city budget is derived from ad valorem or property taxes, and when assessed values drop, so do city revenues. Dillner said city officials plan to cut back expenditures before resorting to tax increases.
Even without an increase in assessed property values next year, Dillner said the city will be in a better budget position. City officials annexed a Kansas City Power and Light property that won’t hit Edgerton’s tax roles until 2011. That should increase the city’s overall assessed valuation even if property values continue to decline.
“We’ve got this year to get through and then we should have a pretty good number due to the KCP and L facility,” Dillner explained.
The city will also earn ad valorem taxes from properties it annexed between Edgerton and the proposed intermodal. However, Dillner said those properties are currently zoned agricultural and are therefore taxed at a lower rate.
“That land has a total tax value to the city of about $3,000 because it’s agricultural land. Until it develops, we won’t be reaping a whole lot of additional cash flow,” he said.
Right now, Dillner estimates construction will start on the proposed intermodal within the next year to 18 months, however the contracts between the city of Edgerton, the Allen Group and BNSF still have yet to be fully signed.
Dillner intimated that BNSF and Allen Group officials have signed the annexation and financing contracts, however the city of Edgerton’s legal team is still examining them.
Construction starting on the intermodal will be an indication to county appraiser Welcome that county property values are likely to start increasing again.
“The intermodal – is it going to come? If it is, when are they going to start moving dirt?” Welcome said. “We have to create jobs here that will then create demand (for homes). And the homebuilders have to wait for that demand before they start building supply of new homes.”