Home Buying in 20152>Question Details

 Blackneck, Real Estate Pro in Leesburg, VA

The new tax assessment for 2010 shows big drop in 20152. How will this value influence the market price? Should I buy now or wait and see?

Asked by Blackneck, Leesburg, VA Sun Jan 24, 2010

I am looking for a SFH at 500-600k. In late 2009, it looks like most houses in this range are sold close to the assessment value of 2009. Now the tax value of 2010 is about 10%-15% less than the 2009. Will this influence the market price in the coming several months? I am not in a rush, but I do want to know when the price will be stable and when is a good time to get a deal.
Specifically, I am very interested in the ridings at blue spring community. It has nice schools, close to my job. But the houses there are much cheaper than those in south riding. is there anything wrong with this community???
Thanks a lot!

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Mary Margaret Gates’ answer
I am going to add a bit more to the great responses you have received. Assessments generate revenue for a specific locality and look to the past- that is, what homes sold for during the past year. The assessment rate is set for the next year and the locality expects a certain level of revenue and will budget accordingly. If the market prices go down during the year- and that can happen for a variety of reasons including a large company in the area moving or closing- the assessments will generally go down because the sales prices go down. Conversely, if there is a demand for houses in the area, prices will go up if supply does not keep up.

A good deal is what you think it is. What is a good deal for one may not be a good deal for another. If you like the houses, the prices are affordable for you, the schools will be good for your kids, , the commute works, and you like the neighbors, it may be a good deal for you.

In today's market, many people are looking at the fact that interest rates are at historic lows and won't remain at those levels. They are also looking at the First Time Home Buyer's tax credit and the repeat buyer's tax credits that have spring deadlines. While these are not reasons for everyone to get into the market at this time, it is working for a lot of people.

Several people who have answered have more expertise in Loudoun than I do (but don't hesitate to ask me about Fairfax, Arlington, Alexandria, Prince William and Stafford counties), so they might be the right people for you to consult.

Best wishes.
Web Reference: http://www.mmgates.com
1 vote Thank Flag Link Sun Jan 24, 2010
The Ridings at Blue Springs is a great community and the kids attend a very good elementary school down the street. We know several families currently living there and several kids at the school. I wouldn't worry about the tax assessment as it has no bearing on a property's market value (what buyer's are willing to pay). What you need to focus on is that Loudoun County has very low unemployment (4.1% as of last month), thousands of jobs being created on a yearly basis, lower foreclosure rates than the majority of the country, excellent schools and facilities and an influx of people on a monthly basis because our economy is so strong. If you are thinking of buying, I wouldn't wait much longer - there is tremendous value in Loudoun County housing and with rates so low now is the perfect time to get qualified and buy. Look forward to seeing you at school!
Web Reference: http://soldbydesignva.com
0 votes Thank Flag Link Thu Feb 9, 2012
Although assessed values are not equal to market values, there is a corelation. As the assessed values move up and down, so do the market values. One follows the other.

We can run properties sold over the last 6 months and take the difference in assessed and market value. Let's say that on average the properties sold were sold at 98% of thier assessed value. It would be fair to say that your property would be worth approximately 98% of the assessed value.

This of course doesn't take into consideration property condition, community location, and current general demand. It does though give us a decent idea of what to expect.

Contact a local Realtor and determine your properties potential value, Realtors are trained and have invaluable current market experience.

Best of Luck! -Pat
0 votes Thank Flag Link Thu Feb 11, 2010
To put it simply, there *is* a relation between market values and tax assessments, but the market values influence the tax values ... not the other way around. Tax assessments are mass estimations based on sales in the previous year.
Web Reference: http://www.GlendaCherry.com
0 votes Thank Flag Link Mon Jan 25, 2010
Assessed values do NOT equal market values and should not be used as such. Not sure if you owned a home in Loudoun in the past, but there was a very long time where assessed values were way below market values. Right after the market starting going south (summer 2005), assessed values were way above market values for a few years.

Market values are best determined by comps - similar properties within the same community that have sold within the last 30 to 90 days. That is what ready, willing and able buyers are willing to pay and is what "market value" is best defined as.

No one has a crystal ball so there is no way to answer your question of when the market will be stable with certainty. What I can comment on is what the market has done in the past. In the case of that community as well as Loudoun and Northern VA in general, market values have stabilized and increased in most areas in the sub-$600K price point over the past 6 months.

Will the increase continue? No way to tell for sure.

Will it stabilize (aka go sideways as defined by up or down by no more than 1 to 2 percent)? I'd say this the most probable scenario near-term (within the next 12 months).

Will market values go down? That depends on a whole slew of factors including the general US economy and current events. At the rate this country is spending and printing money, this is a possibility that we should not ignore.

To chat more about market values within the Blue Springs community, values in general or anything else real estate related, give me a call - 703.582.6900.

0 votes Thank Flag Link Sun Jan 24, 2010
The assessed value does not equal market value. When looking at purchasing a home, you need to consider the basic concept of supply and demand. When the supply is greater than the demand, the market price goes down and buyers have the ability to get a better price on their purchase. When the demand is greater than the supply, prices go up and buyers have less negotiating power.
Please feel free to contact me with the price range you're looking in, I'd be happy to give you the statistics which will give you an idea of how the market is in the 20152 zip code as well as a detailed look at the Blue Springs Community.
Web Reference: http://www.GottaHavePav.com
0 votes Thank Flag Link Sun Jan 24, 2010
Tax values are often different from sales value. Tax assessment could be much higher or lower than sales prices at any given time.

For a prediction of house prices in 2010 look below.
We will have interest rates go higher this year. The federal reserve is buying mortgage backed securities now. They will stop in march. Interest rates will go up then. The federal government is selling $100 billion of bonds each month far into the future. That could also increase interest rates on mortgages.

when interest rates go up buying power goes down.
5% interest rates =100% buying power.
6% interest rates = 89% buying power
7% interest rates = 76% buying power.

When strict lending standards, high unemployment, and no or very small raises are added in I believe we will see house prices drop to meet the much lower ability of people to get a mortgage for houses at their current high prices. (for most of the country)
0 votes Thank Flag Link Sun Jan 24, 2010
No, there's nothing wrong with that community, it's just not part of South Riding. I know it well. Some great homes there. The tax value, in and of itself, has no bearing on the real estate market. Once a year they assess the properties - I talk about this some in this post: http://therealestatewhisperer.blogspot.com/2009/11/automated… I'd love to chat with you in more detail about the market, where it's going and what that might mean for you. Please give me a call tomorrow 703-669-3142 or send me an email vchrisner@kw.com
0 votes Thank Flag Link Sun Jan 24, 2010
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