I see some comments asking about assessed values.
Here's what I think ...who cares about assessed values in a dropping market?? Ignore it.
Assessed values are just a number the municipalities come up with to decide how to extract tax from home-owners. They lag the 'market value' in up markets and sit way above them in down trending markets.
Assessed values are past history. .
Up Trending Market
In an up trending market the current price of a property is probably well above the assessed price
If you get to buy at assessed value you are probably getting a good deal.
Down Trending Market (like we have now)
In a down market assessed values have no meaning what-so-ever. As soon as they come out, the market has fallen below them, and hence they are meaningless. They tell you what someone thought the house was worth a year or more ago.
They are even more meaningless now that the Provincial Government has frozen the assessment values. They did this to prevent a deluge of appeals and reassessments as property prices fall (which would just mean the Municipalities would have to increase the rate of taxes to make up for it and cause an administrative nightmare):
"Property assessments locked in: The Province will lock in the property assessment roll for one year to create certainty for homeowners, businesses and local governments.
“We know that property values have fluctuated widely since assessments were conducted last July,” said Premier Campbell. “To avoid confusion, anxiety and unnecessary assessment appeals prompted by higher-assessed property values that do not reflect current market conditions, we will lock-in B.C.’s assessment rolls at 2007 assessed levels.”
This measure will provide time for markets to stabilize and reflect proper market values so property owners know how much they will pay in property tax and local governments know how much they will collect to provide services. It will help municipalities who otherwise might be forced to make significant adjustments to mill rates and protect homeowners whose assessments would be higher than the market value of their homes. This will not apply to new homes that have not yet been assessed. This will not affect municipalities’ ability to set their own mill rates"
http://www2.news.gov.bc.ca/news_releases_2005-2009/2008OTP0264-001663.htm
The problem is some realtors and sellers still think that selling at assessed is a 'deal' and selling below assessed is a 'real deal'. Not! If you look at some of the sales recently, particularly on more expensive properties, you will see that the sales price and assessed value have very little correlation with each other.
Here's what I think ...who cares about assessed values in a dropping market?? Ignore it.
Assessed values are just a number the municipalities come up with to decide how to extract tax from home-owners. They lag the 'market value' in up markets and sit way above them in down trending markets.
Assessed values are past history. .
Up Trending Market
In an up trending market the current price of a property is probably well above the assessed price
If you get to buy at assessed value you are probably getting a good deal.
Down Trending Market (like we have now)
In a down market assessed values have no meaning what-so-ever. As soon as they come out, the market has fallen below them, and hence they are meaningless. They tell you what someone thought the house was worth a year or more ago.
They are even more meaningless now that the Provincial Government has frozen the assessment values. They did this to prevent a deluge of appeals and reassessments as property prices fall (which would just mean the Municipalities would have to increase the rate of taxes to make up for it and cause an administrative nightmare):
"Property assessments locked in: The Province will lock in the property assessment roll for one year to create certainty for homeowners, businesses and local governments.
“We know that property values have fluctuated widely since assessments were conducted last July,” said Premier Campbell. “To avoid confusion, anxiety and unnecessary assessment appeals prompted by higher-assessed property values that do not reflect current market conditions, we will lock-in B.C.’s assessment rolls at 2007 assessed levels.”
This measure will provide time for markets to stabilize and reflect proper market values so property owners know how much they will pay in property tax and local governments know how much they will collect to provide services. It will help municipalities who otherwise might be forced to make significant adjustments to mill rates and protect homeowners whose assessments would be higher than the market value of their homes. This will not apply to new homes that have not yet been assessed. This will not affect municipalities’ ability to set their own mill rates"
http://www2.news.gov.bc.ca/news_releases_2005-2009/2008OTP0264-001663.htm
The problem is some realtors and sellers still think that selling at assessed is a 'deal' and selling below assessed is a 'real deal'. Not! If you look at some of the sales recently, particularly on more expensive properties, you will see that the sales price and assessed value have very little correlation with each other.
I have never understood the obcession with accessed value either.
ReplyDeleteThe assessors use the market as their guide to making the assessment, and the realtor's use the assessment as their guide to pricing for sale.
So it is a self-feeding, circular process, that will spiral up when prices are rising and spiral down when they are falling.
Yup. You nailed it Anon.
ReplyDeleteBTW I am still stunned about those huge 20-35% declines for Van West, West Van and Port Moody.
The drop has been even faster than I anticipated.
This gives us an idea how much of it was 'real' demand and how much was speculation fluffing up the market.
dunno if you re the right person to ask this? Any idea how much F2833857 sold for?
ReplyDeleteAnon 3.10 - for that you will need to find yourself a realtor.
ReplyDelete