Home Buying in 01930>Question Details

Rick, Home Buyer in Gloucester, MA

In todays housing market do most homes sell for around the assesed value?

Asked by Rick, Gloucester, MA Mon Oct 24, 2011

Help the community by answering this question:

Answers

12
Hi, Rick,

One of the agents who answered your question earlier, Jeffrey Carter, said it well. Home sales are based on market value and not assessed value.

Just to expand on his answer, the market value of a home is determined by what buyers are willing to pay for it. The only way we can get an idea as to the market value of a home is to look at homes in the same local market, that have sold in the past 6 months, that are most comparable to the home currently on the market.

When I say most comparable I mean style, number of bedrooms, bathrooms, location, condition, features, updates, etc. Based on that, an agent, knowledgeable in the local market, will be able to come up with a price range in which the active home would be expected to sell. Where in that range will be determined by whether the home is more comparable to the homes that sold in the upper end, middle end or lower end of that price range.

Whether you are selling a home, or buying a home, you can ask an agent to do a market analysis of the home you are considering. All the best!
Web Reference: http://www.livesharon.com
1 vote Thank Flag Link Mon Oct 24, 2011
I've appraised homes in eight different counties or so. Here's what I've found. When prices are going up, assessed value will be lower than the market value. When prices are going down, assessed value will be higher than the market value. So, to summarize. Assessed values will usually follow the market value. That said, I've seen cases when this is not true. Another point, sometimes, each county will assess their property a bit different. Some counties are extremely close to market value, while others are off by more. So it just depends.
0 votes Thank Flag Link Tue Nov 15, 2011
There is no connection between market value and assessed value. If a home sells close to the assessed value, it is a coincidence and not a correlation between the two.
0 votes Thank Flag Link Tue Nov 15, 2011
Depends on the market and lots of other variables. If you give us just a little more info we may be able to help you better. Generally speaking assessed value is not related to current market value so I would say most times no. it is a piece to consider when valuing a property but not the bottom line.
Web Reference: http://territory.com/
0 votes Thank Flag Link Fri Nov 11, 2011
What town? What price point? Distressed? ... There are too many variables to answer that question so generally. Some towns are re-assessing because they are over assessed. Some towns under-assess to start with. In my town, some properties with houses on them are still being assessed as land only. Every town is different.
0 votes Thank Flag Link Wed Nov 9, 2011
Assessments are for tax purposes only and are based on the previous years sales for that specific town (example: 2011 assessments would reflect sales for similar homes sold in 2010). It is just one factor in the many considerations of a homes listing and selling price.

A more important value would be what have buyers been willing to pay for a home within a 1-2 mile radius of the home with similar qualities within the past 3-6 months.

Remember that a bank appraisal is based on sales in the past 3-6 months (more often 3 months) for similar homes. Most buyers will be taking out a mortgage for their purchase, and sellers should take this issue into consideration.

Best,

Meaghan
0 votes Thank Flag Link Tue Nov 1, 2011
Rick:

This question is one that is very hard to answer and truly in Massachusetts is town specific. I have found working in several different communities that each town's assessed values is a little different. If you want an across the board answer I would say the assessed value can be a barometer, but until you study the market of interest you can not come to a conclusion. I am selling a home in a market where the house is selling for $200K under assessed value for the town. Best
0 votes Thank Flag Link Fri Oct 28, 2011
The truth is people do look at the assessed value when buying a home. Unless the home is super nice the value should be in the same ball park. A house is basically what you are willing to pay.
0 votes Thank Flag Link Wed Oct 26, 2011
In most cases no.... I am seeing many homes sells for much less than assessed value and in some cases more. What you have to remember about assessed value is that it cannot change as fast as market values as the town have a budget that needs to be met. First and foremost that is the most important factor for assessed value.

A quick analysis in Gloucester shows that out of 52 properties sold the average sale price was 398 the average assessed price was 389. While very close there were properties that sold for hundreds of thousand more than assessed price and some that sold for hundreds of thousands less.
0 votes Thank Flag Link Mon Oct 24, 2011
Hi Rick,

Assessed value is a valuation that the town puts on a specific property for tax purposes. At best this number is updated once a year. Home values have dropped in the last 12 months in most markets so in sticking to that theory you'd be overpaying if you based your offer on the assessed value, right? As a home buyer, you should be asking "What is the market value of 123 Main St" An experienced Buyer's Agent will be able to get you that info quickly.

My website provides lots of helpful info for buyers.

Best of Luck!

Jeffrey H. Carter, ABR
Keller Williams Realty
978.717.9015
0 votes Thank Flag Link Mon Oct 24, 2011
Rick,

That's a pretty broad question, so it may be impossible to answer. I can say that in the SF Bay Area, regular sales are coming in at close to the assessed value or a few percent lower. For distressed sales, it's common to see deals close at 10-20% below the assessed value.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Mon Oct 24, 2011
probably not. look around at enough homes and you might notice that assesed values dont typically match the asking and sales prices.
0 votes Thank Flag Link Mon Oct 24, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer