If a property hasn't sold in many years, it's quite typical that the fair market assessed value will be significantly lower than what current market value truly is. Although, in some Madison neighborhoods we're seeing assessed values much higher than true sale prices. An indication of a market adjustment. In many cases, these neighborhoods were "hot" during the boom of 2004-mid 2006. The tax assessor was keeping up with these sales and adjusting all properties similar to these prices. Now that the market adjustment is occuring, many of these homeowners are over-assessed and should contact the city for an adjustment back down.
Confused? It's not an easy answer but suffice to say the best indication of market value is what someone is willing to sell for and what someone is willing to pay.
Tax Assessment "value" is merely a guideline by which a municipality determines the amount of Tax they can collect on a property. A lot of people base what they feel a property is worth (to purchase) based on assessed value. But since there is no across-the-board equality in how each city determines the assessment and fair market value, it has large variances from property to property. (Which you stated in your question)
Plus, alot of municipalities have based their assessments on how much properties sold for at the peak of the market, and have not adjusted for recent sales. Or they may make a judgement on what value they put on a property as an average for a neighborhood. It is a problem that is reflected in most every city nation-wide.
The best way to determine current market value is to have a Realtor provide you with a current market evaluation of comparable homes that have SOLD in the last 1-4 months.
All the best to you!