Just to add to Fahmida's point:
I did a correlation analysis between list price and tax assessment for 108 properties that are currently on the market or were recently sold in 20854 that are in the price range of 600K - 1M. 8 properties did not report a tax assessment on their record so I excluded them.
Some findings for the 100 properties:
- The correlation between list price and tax assessment was 72%.
- 57 had a list price that was below tax assessment, 40 were above tax assessment, 3 were offered at tax assessment.
- 77 properties were listed between 85% and 115% of tax assessment.
In sum, I would say that, in this environment, agents who do not look at tax assessments at all could make their lives a little easier if they would. ;) Tax assessment does seem to be a good first approximation for the listing price. Given that this is a buyer's market, the final price is typically lower than the listing price so this would suggest that tax assessment may be a benchmark for an offer. This is not a universal law. A few years back a buyer would have to pay significantly above tax assessment to be successful.
That said, as was pointed out before, a value analysis is certainly also helpful to estimate the market value of a house.