"They were predicting the market to remain steady through the spring and real estate values to remain about the same. "
They are NOT predicting the values will stay the same. The market is in a downward trend that most economists believe will last for MANY years.
I think Diane Eisner has given the clearest advice. The Assessment, is based on a percentage of what the Assessosr thinks the current market value is at the time they do the assessment; the Appraisal is what someone decides the value is, based on sales over the past 3 to 6 months and is used for Lending purposes; the Market Value is what a Buyer will actually pay for the property. So offer the $600k.
However, I would like to discuss with Diane, her statement; "The tax assessor uses the assessed value to determine the property's taxes.
IMO, this is an issue of relativity. The amount the Tax Assessor collects is dependent on what the voters have voted to spend on various programs. The purpose of the Assesssment Value is to make sure that the collection is equitabale. In other words, your assessment can increase considerably, but if the voters haven't voted for new expensive programs your taxes could actually drop, if there is a sufficient number of new properties available to tax.
It depends on when and what criteria the lastest assessment was made.
My town did an assessment on Market Value at the height of the Real Estate market. In our case, homes are selling at less than the assessment, now that the market has dropped.
As always, the market definition is whatever a Buyer is willing to pay. There are always people out there that cannot live with out that perfect home, so are willing to pay what the Seller is asking.
Look up the area prices on the link and find out what that area sold for in 2000 then adjust it for inflation. You will not be able to buy it for that right now, but that is a good idea what its value will be in 2-3 years.
They may be looking for $500k now, but it is only worth way someone will pay. Don't fall in love with a house, there will be lots of other opportunities coming soon in that area.
Keep in mind that your tax rate probably dropped. Your house might have been assessed at $700k, but most people will actually see just a 25% increase in what they pay.