Assessments
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Finding the Best Deals in Harrisonburg |
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 I recently created HarrisonburgAssessments.com, which analyzes the relationship between sales prices and assessed values. And then it hit me -- what if we compared list prices to assessed values -- might we find the best buying opportunities in and around Harrisonburg? Introducing . . . . BestDealsInHarrisonburg.com! Are the 30 properties on this new website REALLY the best deals in Harrisonburg? Possibly. The properties featured on BestDealsInHarrisonburg.com are being offered at a low list price compared to their assessed value. This is likely to mean that they are a "good deal" -- though if their assessed value happens to be high (relative to their market value) then the deal won't be as sweet. As always, consult a Realtor (such as myself) for expert advice on whether any particular property really is a great deal. BestDealsInHarrisonburg.com is simply shuffling some good prospects to the top of the pile for your consideration. What are you waiting for? Go check it out at BestDealsInHarrisonburg.com. | |
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Finding the Assessed Value of Your Home |
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 How, you might ask, do you find the assessed value of your home?
You can now search for your home's assessed value on HarrisonburgAssessements.com. Before you go search, however, please remember that....
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How do Assessed Values compare to Market Values? |
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 How do Assessed Values compare to Market Values? Wonder no longer! You can now find out via HarrisonburgAssessments.com. You'll want to visit this new site for full details, but here is a quick snapshot....  Find out more about the relationship between market values and assessed values at HarrisonburgAssessments.com. | |
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9.5% Increase In City Real Estate Tax Rate? |
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 The City of Harrisonburg may increase its tax rate from $0.63 (per $100 of assessed value) to $0.69. This would be a 9.5% increase in real estate taxes for property owners in the City of Harrisonburg. This would still leave us with a very low tax rate compared to many other areas around Virginia:
As noted in today's in depth article in the Daily News Record: Under the fiscal 2015 proposal to raise the rate 6 cents, the owner of a city home valued at $ 150,000 will pay $ 1,035 in real estate taxes, compared to $ 945 now. A house valued at $ 200,000 will be taxed at $ 1,380 next year, according to the draft. That owner pays $ 1,260 now.Read the DNR article here, and view the proposed City budget here. | |
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No change proposed for real estate tax rates in Rockingham County |
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 Per the proposed budget published in the Daily News Record on 04/14/2014, Rockingham County is not proposing an increase in the real estate tax rate. If the budget is approved as proposed, the tax rate would remain at $0.64 per $100 of assessed value. Click here to view the entire proposed budget. | |
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Understanding Real Estate Assessments |
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As recently published in the Shenandoah Valley Business Journal.... It's that time of year again, when homeowners (at least in the City of Harrisonburg) are receiving notices of the reassessment of their property. As you strive to understand the new (or current) assessment of your property, let's have a brief refresher course on real estate assessments. First, many people (erroneously) believe that the assessment of their property is an indication of their home's value. In actuality, the assessed value of a property is the value assigned to the property by the local assessor's office, for the purpose of determining how much you will pay in taxes. Certainly, the assessed value is intended to be the precise value of your home – but it is quite possible that there is a disparity in this assessed value and market value. The market value of your home is the price at which it would sell in the current market. Sales Prices vs. Assessed Values in the City of Harrisonburg  To better understand how assessed values relate to market value, I checked on the 2014 assessed value for each of the 328 properties that sold between January 1, 2013 and November 30, 2013. What I discovered, is that properties in the City of Harrisonburg sold, on average, for 97% of their assessed value. Looking a bit deeper, just over a third of City properties (39%) sold within 5% of their assessed value – the remaining 61% had a sales price that was more than 5% higher or lower than the assessed value. Sales Prices vs. Assessed Values in Rockingham County  Performing the same analysis in Rockingham County, we discover that County properties are selling for slightly more than their assessed value (average of 106%) as compared to City properties that are selling for a bit less than their assessed value (average of 97%). Given the great variation in assessed values and market values, homeowners should not rely on their tax assessment for an understanding of their property's value. Furthermore, home buyers should not rely on assessed values to guide them in understanding the market value of a home that they might purchase. Both buyers and sellers should strive to understand the market value of a particular piece of real estate my analyzing similar homes that have recently sold and those currently on the market in a given neighborhood or price point. The relationship between assessed values and sales prices varies based on the price, size, age and location of the home. For a more thorough analysis of the topic, visit HarrisonburgAssessments.com. | |
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Understanding Assessments in Harrisonburg, Rockingham County |
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 Learn More Here: City | County The ASSESSED VALUE of a property is the value assigned to the property by the local assessor's office, for the purpose of determining how much you will pay in taxes. The MARKET VALUE of a property is the price at which a property would sell in the current market. As shown above, properties in the City of Harrisonburg tend to sell for a bit less than their assessed value.....while properties in Rockingham County tend to sell for a bit more than their assessed value. However -- there is a great deal of variance --- explore the data via... HarrisonburgAssessments.com | |
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Comparison of Assessments and Sales Prices in the City of Harrisonburg |
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 click here for more details I frequently hear from homeowners wondering why their assessed value is so high AND from other homeowners wondering why their assessed value is so low. Some homeowners know they could never sell their home for the assessed value, and others know they could it for more than the assessed value. So, to further understand assessed values, let's explore their relationship to sales prices. Click here to view a full comparison of 2013 Sales Prices and 2014 Assessed Values for the City of Harrisonburg. | |
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City SFH Assessments Down 1%, Sales Prices Up 3% |
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 As reported in today's Daily News Record, assessed values in the City of Harrisonburg stayed relatively stable over the past year. As shown above, the average assessed value of single family homes decreased 1% over the past year from $235,000 to $231,900. In the same time period, average sales prices increased by 3%. A few clarifying notes....
Read more about the latest update to City of Harrisonburg assessed values in the DNR article or read more about market values at HarrisonburgHousingMarket.com. | |
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Harrisonburg Property Assessments Decline 1% for 2013 |
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 New assessed values have been calculated for the City of Harrisonburg. These new assessed values will determine the property taxes that each property owner will pay in 2013 --- and the values are based on sales data from the previous year. Harrisonburg has 12,531 taxable parcels, and roughly 9,000 of those parcels will see a change in their assessed values (and thus property taxes) for 2013. How does this 1% overall decline in City property values compare to what we've seen in the Harrisonburg Rockingham Association of Realtors Multiple Listing Service (HRAR MLS)?
This 1% decline in assessed values may or may not be accompanied by a change in Harrisonburg's property tax rate. That rate increased from $0.59 (per $100) to $0.63 (per $100) effective July 1, 2012. City Council will discuss the property tax rate when the City develops the 2013/2014 budget. Click here to read today's full Daily News Record article on City assessments. | |
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Understanding Real Estate Assessments |
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As published yesterday in the Shenandoah Valley Business Journal. Many people believe the assessment of their property istheir home's value. In actuality, theassessed value of a property is the value assigned to the property by the localassessor's office, for the purpose of determining how much you will pay intaxes. Certainly, the assessed value is intended to be the precise valueof your home – but quite frequently there is a disparity in this assessed valueand market value. The market value ofyour home is the price at which it would sell in the current market. Of interest, the City of Harrisonburg real estateassessments are currently a bit more accurate than those in RockinghamCounty. As can be seen in theinfographic, homes sold during 2011 in the City of Harrisonburg sold for 95.1%of their current assessed value. Breaking it down further, 64% of the homes that sold during 2011 in theCity of Harrisonburg sold at a lower price point than their assessed value. This is an indication that many City propertyassessments are likely a bit too high. In Rockingham County, most property assessments are too low –as 70% of properties that sold in 2011 sold for more than their assessed value– and on average, properties sold for 110% of their assessed value. Of note, homes in the City of Harrisonburgare re-assessed every year, while homes in Rockingham County are onlyre-assessed every four years. In thepast, this has resulted in lower than expected assessments in Rockingham Countydue to the infrequent updates to their assessed values. Given the great variation in assessed values and marketvalues, homeowners should not rely on their tax assessment for an understandingof their property's value. Furthermore,home buyers should not rely on assessed values to guide them in understandingthe market value of a home that they might purchase. Both buyers and sellers should strive tounderstand the market value of a particular piece of real estate my analyzingsimilar homes that have recently sold and those currently on the market in agiven neighborhood or price point. Click on either image below for a printable PDF....
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Real Estate Tax Analysis in Harrisonburg and Rockingham County |
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The City of Harrisonburg is considering increasing the real estate tax rate from $0.59 per $100 of assessed value to $0.63 per $100 of assessed value. Rockingham County is also considering a $0.04 increase, from its current tax rate of $0.60 per $100 of assessed value to $0.64 per $100 of assessed value. To understand the potential rationale behind such an increase, let's examine funding levels given a few assumptions to make the math a bit easier. First, we will assume that all tax assessments are at exactly 100% of the market value of properties. Second, we will assume that both Harrisonburg and Rockingham County are comprised of 1,000 privately owned homes. Third, we will assume that all homes have market values (and assessed values) of the median sales price.  As shown in the table above, the median sales price in the City of Harrisonburg declined 20% between 2008 and 2012 from $213,500 to $170,000. If the City of Harrisonburg were comprised of 1,000 median-priced homes, the tax base and thus the tax revenue would also decline by 20% from $1.26M to $1M. Even with the proposed $0.04 proposed increase in the tax rate (from $0.59 to $0.63) the tax revenue would still decline by 15% from $1.26M to $1.07M. In fact, the tax rate would need to increase to $0.74 (a 25% increase) in order to maintain the same tax revenue as in 2008 --- assuming that assessed values have tracked precisely with median sales prices.  As shown in the table above, the median sales price in Rockingham County declined 20% between 2008 and 2012 from $215,000 to $171,750. If Rockingham County were comprised of 1,000 median-priced homes, the tax base and thus the tax revenue would also decline by 20% from $1.29M to $1.03M. Even with the proposed $0.04 proposed increase in the tax rate (from $0.60 to $0.64) the tax revenue would still decline by 15% from $1.29M to $1.1M. In fact, the tax rate would need to increase to $0.75 (a 25% increase) in order to maintain the same tax revenue as in 2008 --- assuming that assessed values have tracked precisely with median sales prices. | |
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Home Values compared to Tax Assessments in Rockingham County |
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I'm asked quite frequently about the relationship between home values and tax assessments. After a lengthy analysis of the 528 home sales in Rockingham County during 2011, as recorded in the HRAR MLS, here is what I'm finding.... (click here for the same information for the City of Harrisonburg)  click the infographic above for a printable PDF version. The bottom line here is that County properties seem to be under-assessed by an average of 10%. Most buyers pay more than assessed value for the properties they purchase. | |
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Home Values compared to Tax Assessments in the City of Harrisonburg |
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I'm asked quite frequently about the relationship between home values and tax assessments. After a lengthy analysis of the 266 home sales in the City of Harrisonburg during 2011, as recorded in the HRAR MLS, here is what I'm finding....  click the infographic above for a printable PDF version | |
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Proposed Rockingham County budget (2012-2013 fiscal year) and proposed 2012 tax rates ($0.64 for real estate) |
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 Some observations without knowing much about the budget:
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Should I be worried if I am paying more than the assessed value for a house? |
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 If you're buying a single family home in Rockingham County, chances are, you're paying more than assessed value for the house. Should you be concerned? No --- it just means that the assessed values aren't currently as close to market value as they are intended to be. To check in on the relationship between purchase prices and assessed values, I pulled all single family homes that sold in the past month in Rockingham County that were not bank owned sales. I then compared each sales price to the assessed value and found that most buyers paid at least 5% more than the assessed value (shown in red above). If almost all buyers were paying significantly less than assessed value, I'd be concerned about you paying more than assessed value --- but assessed values in Rockingham County are still quite low right now, leading to the data above. For your reference, in these 38 transactions, buyers paid (on average) 15% more than the assessed value of the home. | |
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Is there a correlation between selling prices and assessed values in Rockingham County? |
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Someone asked me this question via the chat feature on my web site a few days ago....and it's a good question: What are homes selling at in Rockingham County in comparison to tax assessed value on the property. For example if home is assessed at 200,000, what would the list price be? It's a bit difficult to answer that question specifically, because I can't easily search for properties that are assessed for (or close to) $200K and then limit it to those that have sold recently. So let's reverse it. Below are five homes that have sold in the first 4.5 months of this year between $195K and $200K in Rockingham County.
So, we can conclude several (not necessarily helpful) things from this analysis:
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City of Harrisonburg Reassessment Shows Slight Decline in Home Values |
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The City of Harrisonburg just released updated assessment data for all City properties, which showed a 1% increase in overall property values. When diving down into residential properties we discover that there was a 1.4% decline in single family home values and a 0.3% decline in townhome values. These will result in small decreases in tax bills if the tax rate does not change. (see DNR article) Some, however, might suggest that these very small adjustments in value are out of line -- that their property values have adjusted much more than 1.4% or 0.3% over the past year. Indeed, our overall market area has experienced a decline in median prices of roughly 5% over the past year. But looking a bit closer, there are actually some areas where our local real estate market is performing reasonably well....  During the first 10 months of last year (Jan 2009 - Oct 2009) there were 121 sales of single family homes in the City of Harrisonburg, with a median sales price of $209,000. This year, however, during the same time period (Jan 2010 - Oct 2010) there were 128 sales of single family homes in the City of Harrisonburg, with a median sales price of $211,250. Again, this improvement runs counter to the market as a whole, where sales are still slowly declining and prices are still slowly declining. | |
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Assessments of $300k+ Rockingham County Homes |
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Property assessments are used to determine the amount of taxes that each property owner will pay. Can these assessed values also be used to estimate the value of a home? In theory, yes --- after all, the assessed value is intended to be the true market value of the home --- but it doesn't always seem to work. Case in point....one of my clients is considering two homes (among others) that have very similar assessed values, but have asking prices over $50k apart. Is the owner of the higher priced home just being unrealistic? Or are the assessments less than accurate? One way to examine this is to compare recent sales prices to assessed values. I'm going to focus on homes over $300k, as I sense that there might be more disparity in assessments with higher priced homes. In the past three months, there have been 10 sales of homes in Rockingham County with sale prices over $300k, with Harrisonburg mailing addresses.  As you can see, there is an enormous swing in the ratio between sales prices and assessed values. These ten buyers paid, on average, 16% more than assessed value for their homes. A few inconclusive conclusions:
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Harrisonburg City Assessments Compared To Home Sales Prices |
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The new 2010 real estate assessments are out and I thought it might be of interest to compare these new assessed values to the prices for which properties are actually selling. Below are the 12 properties in the City of Harrisonburg shown as sold in the HRAR MLS between January 1, 2010 and February 14, 2010.
As you can see, some properties sold above AND some sold below assessed value. On average, these 12 properties sold for 90% of assessment, and the median ratio was 87%. If we assume that assessed values are a VERY GOOD INDICATOR of market value, this analysis could mean that:
If I didn't walk in too many circles there, tell me what you think! | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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Commonwealth of Virginia
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