Understanding Your Home’s Market Value vs. Assessed Value

Asheville’s explosive growth has led to a booming housing market in the last few years. Although our area has been growing for decades, since the pandemic, people have moved to Asheville in droves. This has led to increased property values for residents of Buncombe and surrounding counties.

You may have noticed the assessed value of your home increasing during this timeframe. If so, you may be wondering if it’s time to sell. However, your assessed property value and the market value for your home are not the same. In this article, we’ll help you understand the difference so that you can make the right move for your property.

What Is a County Property Assessment?

County property assessments are the process by which the value of a property is determined for taxation. The following are some of the factors involved in county property assessments:

1. Property inspections: A county assessor or inspector will visit the property to determine its physical characteristics, such as the number of rooms, size of the lot, condition of the structure, etc.
2. Market analysis: The assessor will also look at recent sales of similar properties in the area to determine the market value of the property.
3. Property information: Assessors also consider any improvements or additions made to the property, such as a new roof or an addition to the house.
4. Property tax records: The assessor will also review the property’s tax records to see if any exemptions or special assessments apply.
5. Income approach: In some cases, the assessor may use an income approach to determine the property’s value, especially for income-generating properties such as rental properties or commercial buildings.
6. Cost approach: The assessor may also use a cost approach, which considers the cost to replace the property with a similar structure, considering depreciation and obsolescence.

The purpose of county property assessments is to determine the value of a property for property taxation. The assessment determines the taxes a property owner will pay to their local government. The process is usually conducted by a county assessor or a team of assessors, who are responsible for determining the value of all taxable properties in the county.

Factors That Are Considered in Property Assessments

Several other factors can be considered in a property assessment. These can include the location of the property, its age, and its overall condition.

Assessors will also consider any unique property features, such as a pool, a fireplace, or an oversized garage. The value of any improvements or upgrades made to the property will also be considered.

Once the assessor has gathered all the relevant information, they will use various methods to determine the property’s value.

Property Assessment Methods

The most common methods include the sales comparison approach, the income approach, and the cost approach. The sales comparison approach involves comparing the subject property to similar properties recently sold in the area.

The income approach involves estimating the potential income the property could generate if it were rented or leased, and the cost approach involves estimating the cost of replacing the property with a similar structure.

It’s important to note that property assessments are not static and can change from year to year. This can happen for various reasons, such as changes in the local real estate market, changes in the property itself, or changes in the assessment method the assessor uses.

Property owners can appeal their assessments if they believe the value is inaccurate. In most cases, they can request a hearing before a local board of assessors, who will review the evidence and decide.

The Differences Between Your Home’s Assessed Value and Market Value

Property assessments and market value are related but distinct concepts in real estate.

Property assessments are an estimate of the value of a property to determine local property taxes. They are typically performed by local government assessors and are based on the property’s value as of a specific date, such as January 1st of each year.

The assessors take into account various factors, such as the size of the property, the age and condition of the buildings, and the location, among others, to arrive at an assessed value.

Market value, on the other hand, is the price that a property would fetch in the open market if it were put up for sale. It’s the price a buyer is willing to pay for a property, and a seller is willing to accept.

Factors Influencing a Home’s Market Value:

Several factors can influence the market value of a home, including:

• Location: The location of a home is one of the most critical factors that can affect its value. Homes in desirable areas, such as those with good schools, easy access to amenities, and low crime rates, tend to be more valuable than those in less desirable locations.
• Condition: The condition of a home can also impact its value. Well-maintained homes in good condition are generally more valuable than those that are run-down and in need of repair.
• Size: The size of a home is also a critical factor in determining its value. Larger homes with more square footage are typically more valuable than smaller homes.
• Age: The age of a home can also impact its value. Newer homes are generally more valuable than older homes, as they often have modern features and amenities in high demand.
• Upgrades and renovations: Homes that have been upgraded or renovated are typically more valuable than those that haven’t. Upgrades such as new appliances, updated bathrooms, and modern kitchens can increase a home’s value.
• Market conditions: The state of the local real estate market can also impact the value of a home. In a seller’s market, where demand is high and inventory is low, homes are generally more valuable than in a buyer’s market, where supply exceeds demand.
• Economic factors: Economic factors such as interest rates, employment levels, and consumer confidence can also influence the value of a home. In a strong economy, where people have more disposable income, homes are generally more valuable than in a weak economy.

While some of these factors overlap with those that determine a home’s assessed value, it’s important to note they are not always the same. The assessed value is often lower than market value because the purpose of assessments is to determine property taxes, which are usually a fraction of the property’s full value. Century 21 Connected is a Buyer’s Agent in Asheville, NC.

Market value can fluctuate much more rapidly than the assessed value and is usually the higher of the two. Still, Buncombe County has taken strides to close the gap in recent years. For homeowners, if you’re considering listing your home, the best practice is to work with an experienced real estate agent who knows this market. Contact a REALTOR® local to Asheville, NC.

Reach out to the team at Century 21 Connected for more information about buying and selling homes in the Asheville area!