Monday, January 09, 2012

Assessments today: Where did the water go?

So I don't read any assessment news today.  That tide sure is receding awfully far and fast though.  Again if you are here for the first time after reading Brian O's column on Sunday (seems to be a lot of you) then you may want to start with my previous post.

In the eternal hope to find the signal in the noise, here are some pictures of all that should really matter if we cared about a fair and accurate assessments.  These take a selection of most recorded sales transactions in 2010 and compares the sales price actually recorded to the current 2002 base year assessment values in use, and then does the same comparison of 2010 actual sales data to the recently, and briefly, released assessment values that are out in the twilight zone somewhere.  and no, I do not have an explanation for why anything like this has not been produced more officially by anyone. 

I'll skip a longer explanation, let's just summarize by saying that in the ideal world we never quite reach the sales price and assessed value would be identical.  That would put all of these points on the red line I have drawn as a reference there in each graph. 

This is clearly all a preliminary look at what could be incomplete data.  But given the complete paucity of actual diagnostic data released by the city or county on any of this,  we really ought to have some modicum of data to debate with.

So here is what I get first. Which looks like it does a better job?

At first look, the answer seems pretty clear. Certainly everyone over $200K or so in value looks to be valued spot on. Of course it still is the case that most city parcels are valued at the low end of the range there.  Probably should zoom in there and look again:

So again, seems pretty close for everything above $100K or so in value.  Still can't tell what is going on at the lower end of the range.  So again zooming in:

So you would want to see a lot better at the lowest end of the range, but the use of the 2002 base year values at this point sure looks like white noise to me. Still could improve some on the lowest valued properties, but honestly those are always going to be the most difficult.  There are a number of things going on in that range. You can see where I cut off the data below $5K.  I would discriminate differently if I were doing this more formally.  Still a lot of the low valued transaction values are not really arms-length market value transactions (i.e. transfers within a family for example) which may account for more points than you want to seein the top left  there.   Things like folks flipping properties coming out of foreclosure or post-REO sales all likely are showing up there along with other transactions thay may not represent market valuations.  Not to say there are not going to be some debatable valuations at the low end, but it may not be as bad as that last graph might imply.


Anonymous MH said...

Certainly everyone over $200K or so in value looks to be valued spot on.

That's the problem right there, if you are running for election.

Monday, January 09, 2012 9:12:00 AM  
Blogger DavidCharlton said...

It's easy to see the unluckiest person in Pittsburgh, the person who, in 2010, bought a property for ~$180k and found it supposedly worth >$600k a year later.

Monday, January 09, 2012 9:52:00 AM  
Anonymous BrianTH said...

Unluckiest, or best bargain hunter?

Anyway, keep it coming, Chris. I actually think the message is slowly getting out, and it may make a difference.

Monday, January 09, 2012 11:23:00 AM  
Anonymous Patrick said...

Seems to me that most properties that sold recently (2010) at over $100,000 are underassessed, although by a somewhat consistent ratio.
A huge number of the properties sold under $100,000 (which happens to be a a large percent of homes in this county) are assessed at HIGHER than the sale price. [I can personally attest that houses sold prior to 2010 also went way up.]

The lesson: buy a less expensive home, the county will raise your taxes by jacking up the value; buy a more expensive home, the county will give you a break. Tax the poor to aid the rich.

Monday, January 09, 2012 1:06:00 PM  
Blogger C. Briem said...

that is true a bit, but isn't the disparity you cite far worse in the base year assessments.

Monday, January 09, 2012 1:08:00 PM  
Anonymous Patrick said...

It's worse for the 2002 for sure, but the whole point of the reassessment was accuracy and fairness. I bought my house the year after the base year in a gentrifying neighborhood, but many of the expensive homes nearby, which are responsible for MY assessment going WAY up, are assessed at less than what they sold for - some by over $100K less.

And of course a home that sold in 2010 will be less under-assessed in 2012 than the 2002 value - ten years of basic inflation (not even accounting for gentrification) will see to that.

The fact is that homes that sold within a year of the data being gathered are systematically over assessed for low and moderately price homes, and systematically underassed for higher priced homes.
It's not fair to the low priced home buyer, but it is also particularly unfair to someone who bought a home years ago, in many cases decades ago, only to have the price skewed upward - not just by high priced sales nearby (of homes that aren't even assessed at the high price they paid), but by a general bias in favor of bumping up the assessed value of low cost homes.

Sure, my home is worth more now - but I won't receive that windfall until I sell it. My boss isn't paying me a higher salary just because I live in what is now a trendier neighborhood.

Monday, January 09, 2012 1:38:00 PM  
Blogger C. Briem said...

I understand the pain, but it is an argument that nobody gets away with most anywhere else in the nation where real estate appreciation has been far far higher than Pittsburgh's over the last few decades.

Again 75% are looking at a tax increase of at most 10%.

Monday, January 09, 2012 1:56:00 PM  
Anonymous BrianTH said...

There are, of course, various financial products that allow you to draw on your extra equity without actually selling.

By the way, I'm curious about that prima facie underassessed line of properties along the X-axis, between roughly $0-$20,000 in assessed value and particularly dense at under $15,000 of sales value, but arguably continuing out on a diminishing basis to the end at $400,000.

Monday, January 09, 2012 5:26:00 PM  

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