The assessed value of a property is an estimate of its worth, typically determined by the local government for the purpose of taxing the property. On the other hand, the market value of a property is the price that a buyer is willing to pay for it.
In this blog post, we'll explore the differences between assessed value and market value and why they may not always be the same.
Differences between assessed value and market value
Assessed value:
- The assessed value of a property is an estimate of its worth, typically determined by the local government for the purpose of taxing the property.
- The value is often based on a formula that takes into account factors such as the size of the property, its age, and the value of similar properties in the area.
- Assessed values are usually reviewed and updated periodically, typically every few years. This can result in changes to the amount of property tax that a homeowner is required to pay.
Market value:
- The market value of a property is the price that a buyer is willing to pay for it.
- Market value is based on the price that a willing buyer and seller agree upon, which can be influenced by a wide range of factors, including supply and demand, economic conditions, and the condition of the property.
- The market value of a property can fluctuate over time due to changes in the local real estate market. For example, if demand for housing in an area increases, it can drive up the market value of properties. On the other hand, if demand decreases or there is an oversupply of housing, it can lead to a decrease in market value.
In conclusion, it's important to understand the difference between assessed value and market value when it comes to real estate. While the assessed value is an estimate of a property's worth, typically used to calculate property taxes, the market value is the price that a buyer is willing to pay for it.
These values can differ due to a variety of factors, including the condition of the property, supply and demand, and economic conditions. It's important to keep in mind that the assessed value is not necessarily the same as the market value, and it's the market value that ultimately determines the worth of a property.
