High-end home sales on the rise

More expensive homes are changing hands than ever before in Carlton County, which saw a $1.29 million property sale close Sept. 15, and 16 sales over $600,000 in the past 12 months.

"We're seeing record increases in values," county assessor Kyle Holmes said. "When it stops, only the buyers and sellers will let me know. Right now, it's not slowing down."

Residential home assessments have increased 70 percent from 2021-23, with respective increases of 20 percent, 30 percent and another 20 percent on track for this year.

Neither inflation, nor rising interest rates has slowed the market.

"It's booming and when it stops nobody knows," Holmes said.

More good news for Carlton County: new homes building is also tracking up. Outside Cloquet and Carlton, which handle their own permitting, there have been 60 new homes built so far in 2023, following 77 last year and 60 the year before that.

Twin Lakes Township saw 22 new home builds permitted in 2022. It's by far the largest concentration in the county.

"We've had some really good years for new houses in the last three or four years," zoning and environmental services administrator Heather Cunningham said.

Following the 2012 recession, the county experienced modest new residential home-building, topping out with the number of annual builds in the 20s, 30s and 40s.

Cunningham's office provides the permits for new home builds.

"It's definitely good news for the tax base," she said. "We're seeing more subdivisions come through the office - people splitting up 10 acres into two fives, people breaking up larger tracts of land and people building."

New builds expand the tax base, while rising home values do not, Holmes said.

"Values going up doesn't correlate to taxes going up [or down]," Holmes said. "But new construction definitely helps us hold taxes in line. ... Any new construction helps alleviate that burden, that pressure, and we're excited to see the continued climb."

Until recently, new home builds peaked in the early 2000s, with an average of 120 new builds from 2000-05. The lowest point recently was 24 new builds in 2011.

Holmes described the $1.29 million sale last week in Thomson Township.

Built in 2012, "it's a newer, executive-style home on 40 acres that sits right up against Jay Cooke State Park," Holmes said. "It's got an attached garage and a pole building. It's a very nice house, and the highest sale I've seen on a residential place [in the county]."

Two years ago, Holmes' office registered the first $1 million farm sale. Land values are soaring, too. Land that had been valued at $2,000 per acre in the Wrenshall area is now selling for $5,000 or $6,000 per acre, he said.

"Nothing is slowing down," Holmes said.

Of course, Carlton County is not alone. Home values have skyrocketed nationwide, and when Holmes meets assessors in surrounding counties the story is the same.

"It's happening everywhere," Holmes said. "We're not unique. But it may be more impactful in Carlton County, because we've been shielded in the past."

It could be even better, according to county coordinator Dennis Genereau, who spoke to the county board earlier this month about preparing to access new funding from Minnesota's $1 billion housing omnibus bill, as well as more than $100 billion from the federal government.

"They're historic," Genereau said. "We've never had bills at the state and federal level that have spent that much money on housing."

Department heads from throughout the county have been meeting since May 1 to address the housing shortage felt both nationally and locally. The county is also working with the housing and redevelopment authority for Cloquet and Carlton to get up to speed. Their goal, Genereau told the commissioners, is to be poised to apply for funding when it becomes available. The ultimate result would be construction of new housing on county lands.

The county needs to be prepared, Genereau said, "because those dollars are going to be grabbed."

In the meantime, pricey homes are expanding without the added state or federal help. Holmes noted how the situation could be accelerated if there were more independent housing contractors working in the area.

"Right now, if you want to build a house, good luck - most contractors are booked a year or two in advance," Holmes said. The only way to fix that is for more start-up contractors to get involved, he said.

Regarding who is buying into the pricey home market, Holmes and Cunningham both noted that new builds and buys are coming from all over. There are people who left the rat race of urban life during the pandemic, people from Cloquet moving to the country, folks from Iowa and other locales relocating to Carlton County.

"It's not one demographic," Holmes said. "It's people all across the board."

Since 2020, the county has seen 87 home sales of $500,000 or more - 27 of those have come in the last 12 months.

Of course, things will change, and values will recede, Holmes said. Just as they did following the 2012 recession.

"We would have expected the economy would have slowed it down," Holmes said. "We would have expected inflation or interest rates to slow it down. But, the higher end properties continue to sell."