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The latest city assessments are bringing some unusual news to much of Minneapolis: Home values are dropping.

Drops of $20,000 to $30,000 are not uncommon in middle-class areas of south Minneapolis, where just a few months ago the assessor was expecting values to remain stable.

The arrival of assessment notices represents the latest evidence that the sagging home market is having an impact even on those who stay put and aren't surrounded by foreclosures.

Hennepin County Assessor Tom May said suburban residential property is down between 2 and 3 percent.

Ramsey County owners should start to see their notices by midweek.

Some homeowners welcome a falling assessment, in hopes they'll pay lower taxes. Others worry that they're losing equity in their biggest asset.

But the impact of this year's values on next year's taxes isn't clear. It depends partly on how much the city levies and partly on how a home's value changes in relation to the city's overall tax base. But with home values sagging and commercial property appreciating, it's likely that homeowners as a group will bear less of the city's tax burden, reversing a long-term trend.

Values down, prices up?

Homeowners are getting news of dropping values even in parts of the city where Minneapolis Area Association of Realtors data show rising median home prices in 2007.

For example, median sales prices reported by Realtors for the Longfellow community rose by 3.6 percent last year. Yet some homeowners are getting notices of percentage reductions in the mid-teens. Ditto for southwest Minneapolis, where sales prices rose 8 percent. One explanation is that sales data are gathered across the entire year, while the assessor estimates property values as of year's end.

More at Star Tribune- http://www.startribune.com/local/16482126.html

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