Correlation or no correlation between assessed and market values?

Asked by First Timers, Honolulu, HI Wed Feb 10, 2010

Is there any correlation between the City & County of Honolulu Assessed value vs. Market value of a condo townhouse? Or are these values used for two distinct purposes- taxes only vs. selling/buying purposes.

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6
John Gephart, Agent, Honolulu, HI
Wed Sep 4, 2013
There are some neighborhoods in Honolulu that DO show a correlation between assessed value and sold value. You also have to look at property condition too to determine a price range.
0 votes
Mack McCoy, Agent, Seattle, WA
Wed Feb 10, 2010
You can test this yourself - look at the assessed value of recently sold homes, and see how they compare to the sales price.

Or, you can take our word for it - not so much correlation.

But it is something that you can test for yourself.
0 votes
Cindy Siok, Agent, Honolulu, HI
Wed Feb 10, 2010
Hi,
Tax assessments are done for tax purposes every year. If the assessment is too high, the homeowner can dispute the amount, so the assessments are usually not skyhigh. If prices are rising quickly assessments can be quite low. If prices are falling rapidly, they can be too high until a new assessment is done. Most of Oahu's neighborhoods are fairly stable and assessment values are often close, but really should not be given any weight to determine current market value. I've seen situations where assessments on extremely similar properties in the same neighborhood differ by quite a bit. A Realtor can look up comparable sales in the neighborhood - this is a better route to determine value. An appraiser will also look at current neighborhood sales and also factor in the differences between homes (a pool, an addition, remodeling, lot size, etc.)
0 votes
David M Nash, Agent, honolulu, HI
Wed Feb 10, 2010
No Correlation to what the value of the home is, the market determines the value....and more importantly, what the property is worth to you compared to other units that you have seen. Do not get caught up in any other number besides price per square foot and if it fits for your life, time horizon, budget, and amenities.

Watch this set of first time home owner Vlogs and then email me with questions.
http://www.theoahuagent.com/FirstHomeVlogs.ubr

Have a great day and let me know when you want someone to negotiate firmly the right price for your new home.

Aloha,
David Nash
0 votes
Patrick Thies, Agent, Anytown, IL
Wed Feb 10, 2010
Assessed value is used for tax purposes. It is based on what homes are selling for at the time the assessment was done. County assessments are usually done on a whole every couple of years.

Market value is what the home may be worth today based on sales and comps usually 3 to 6 months back. It's the current value the home may have.

Assessed values are usually behind the current market value. Assessed values can be lower than current market because they current market may be doing great and increasing in value rapidly, while the assessed value has not caught up. The assessed value can also be higher when the market is not doing as well becasue the assessed value may have been done when properties were selling at a higher price and now the market has dropped and again the assessed value has not caught up.
0 votes
Richard Sand…, Other Pro, Portland, OR
Wed Feb 10, 2010
Yes, but with limitations. The assessed value estimates market value using a mass-appraisal method (valuing a large number of properties using a large database of sales information) as of a specific date. For example many 2010 assessments have an effective date for valuation of Dec. 31, 2009, or Jan. 1, 2010. In order to value all taxable properties as of the effective date the local assessor would consider 12 to 18 months of sales data for the period before the effective date (say 12 months of sales ending Dec. 31, 2009, for 2010 assessments). An independent appraiser valuing your property probably will use the date of inspection as the effective date and use comparable sales during the last 90 days to esitmate market value. Because the market for real estate changes both the assessed value and market value estimated by the appraiser are good for only the effective date of value.
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