By Elaine VonCannon, ABR, SRES, Associate Broker, Notary, Team Leader, Property Manager, Award Winning Agent
Real estate assessment values are essentially taxes determined by the county or municipality where a property is located. These taxes are collected from the property owner and used to pay for municipal services.
Assessment values on properties in Williamsburg, James City and York Counties are on the decline in 2010 and 2011. Yet actual home prices are showing great variance - either above or below assessed value. For example, in York County two out of eight homes sold for less than assessed value in 2011 while the other six sold for more than assessment, according to an article in the Virginia Gazette, "Price Vs. Appraisal" by Steve Vaughan. The article also noted that in James City County pricing above or below assessed value has been found even in the luxury real estate market.
James City County Real Estate to Decline 6% in Assessed Value by July
Final 2011 end-of-year figures indicate pricing for real estate assessments in James City County are down. Assessments in James City County completed in early 2010 declined by .9%. According to research collected by Steve Vaughan, "real estate assessments in James City are estimated to drop by 6% come July." James City County properties are assessed every two years and are due to be re-assessed in 2012.
York County Property Assessments Down in 2010 & 2011
Vaughan's article also indicated York County assessments are on the decline. Decreases of 1.4% in 2010 and 4.5% in 2011 are cited. Rick Millman, the County Assessor said, "Homes below $250,000 have held up better than town homes or condos. Homes in the $250,000-750,000 range have not done as well because of the limited number of potential buyers that can, or are willing to purchase homes in that range." Meanwhile, Millman indicated waterfront properties and luxury homes have been able to hold their value.
How Important is a Tax Assessment When Determining Market Value?
Buyers and sellers should not use the tax assessment as a guideline for the value of a home. Many home sellers do not understand that tax assessment value has little to do with the market price for a home. In real estate transactions, market price is determined by an appraisal.
The Current Market Analysis (C.M.A.) is a wonderful tool REALTORS use in order to price a home before it is placed on the market. This report will survey comparable properties and recommend realistic price ranges. Matters affecting current real estate price variation include: age (when home was first built and recorded), short sales and foreclosures that have closed in the past 12 months, location of the home, and other factors.
Home Valuations on Popular Real Estate Listing Websites
Many homeowners are using websites that display free or low cost real estate listings to find values on their homes. This type of property valuation is fraught with difficulties and produces mostly inaccurate market pricing. These websites are usually reliant upon computer-generated methods to determine pricing on a property, and their estimates are generally based on averages.
When a seller lists a property, no matter where it is located, he or she should have a qualified REALTOR gather real time home pricing information. Do not rely on tax assessments or real estate websites to provide accurate, current information on home listing prices.
In conclusion, tax assessments are not the primary source of pricing information for real estate transactions, in any real estate market. Assessments exist and are collected so a tax base can provide the necessary support for a community. For pricing, request a Current Market Analysis from a real estate professional. Buyers truly interested in a property will have an appraisal conducted because it will be required by a lender or bank to close the