Let me remind you of the definition as provided by the
County Assessor’s office:
Consistent with the definition above, only valid home sales
are used by the County Assessor’s office when selecting comps. Foreclosures, title transfers, inheritances,
etc. don’t meet the criteria of “two willing parties.”
For homes that have not recently sold, the County Assessor’s
office has to estimate the appraised value.
For St. Louis County, this is done using the CAMA system discussed
previously. Though there are various
methods for estimating the value, the end result is still exactly that – an estimation.
But what about properties that have sold recently on the open market? By definition, when “a property is sold by a
person who is willing but not obligated to sell it, and bought by a person who
was willing to purchase but not forced to do so.” In that case, by the County Assessor’s own definition, the price at which the
house actually sold IS the true value in money. Given that fact, one could reasonably
conclude that the County Assessor’s task of reassessing homes that recently
sold would be very easy and straight-forward. Afterall, the true value in money is already defined for them.
Nope.
They calculate their own values.
In what other-worldly dimension does the undisclosed
methodology used by the County Assessor’s office for calculating market value
take precedence over ACTUAL MARKET VALUE?
What’s worse is that they’re really not very good at it.
Instead of the calculated values resulting in a valuation
close to the actual selling price – which would thereby support a likely valid
estimation of the other homes that haven’t
sold recently -- the real market value
(selling price) compared to their Assessor’s calculated value shows how badly their
values are off-target. And it’s not
just that it’s consistently low or consistently high. It’s not consistently anything.
I pulled the list of nearby home sales posted for my
property for 2017 and filtered out all but the ones classified as valid
sales. This left 235 valid home sales,
each with the sale date and price as documented by the County Assessor’s
office. Then I looked up the assessed
values of each. If the sale date was in
2014, I logged both 2015 and 2017 re-assessment values. And here are my results:
From the list of 235 valid home sales within a one-mile
radius:
- 68 of the homes on the list sold in 2014.
- When those homes were re-assessed in 2015, 60 of the 68 were assessed at below what they sold for, on average more than 10%.
- The actual percentages of variance for the 2015 reassessment year ranged from more than 25% below selling price to more than 8% above selling price.
- When those same homes that sold in 2014 were reassessed in 2017, 45 of the 68 were still assessed at less than what they sold for 3 years prior, on average by more than 5%.
- 167 of the homes on the list sold in 2015 or 2016.
- When those homes were re-assessed in 2017, 135 of the 167 were assessed at below what they sold for, on average almost 9%.
- The actual percentages of variance for the 2017 reassessment year ranged from more than 40% below selling price to more than 17% above selling price.
A similar study of 2019 reassessments wasn’t any better, and
may be even worse:
- 187 valid home sales in 2017 and 2018
- When those homes were re-assessed in 2019, 114 of the 187 homes were assessed at below what they sold for, on average nearly 8%.
- The actual percentages of variance for the 2019 reassessment year ranged from more than 36% below selling price to more than 27% above selling price.
While some property owners might be fine because they were
in the group that were under-valued, others that were in the over-valued group
legitimately might feel discriminated against.
This is what the County Assessor’s office does when they know the actual market value.
It’s like being handed the answer sheet before a final exam,
and yet somehow still failing, miserably.
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