Since 2014 property tax assessments were made public a week ago, several media sources (us included) have worked hard to evaluate the credibility and reliability of the new assessments. This task is made far more challenging by the fact that the Office of Property Assessment is only releasing limited data, refusing to compile all of the data on a single disk. Nevertheless, we’ve been doing our best and have come up with some interesting findings thus far.
Today’s It’s Our Money wonders why many properties have been assessed at higher or lower number than they’ve recently sold for. Take two properties on the 2000 block of Pemberton Street for example:
2017 Pemberton St. was purchased in May of 2010 for $379K, but has been assessed at $290,300. It has about 1,150 sqft of living space, with 2 bedrooms, 1.5 bathrooms, and a finished basement. When it sold, it had just been gutted and rehabbed.
2025 Pemberton St. was purchased six months later for $300K, but has been assessed at $359,400. It has about 990 sqft of living space, with 2 bedrooms, 1 bathroom, and an unfinished basement. It was partially rehabbed in 2003, with some additional work coming in 2006.
So what gives? Is 2017 underassessed? Is 2025 overassessed? Is either correctly assessed?
According chief assessment officer Richie McKeithen, variations like this are to be expected. He believes that some people paid too much or too little for their property, and that the assessments should reflect actual value better than sales price. If that’s OPA’s logic for using formulas to assess homes that have sold in the last five years, it’s clear that they’ve outsmarted themselves.
It’s true that people occasionally get amazing deals on homes, but nowadays most people have access to more information than ever, and those situations are more and more rare. As for people overpaying, that’s even less common. Remember, the vast majority of home purchasers need a mortgage, and banks aren’t in the business of lending on more than homes are worth. At least not since 2008.
Councilman Squilla recently expressed that “there’s maybe some type of flaw in the process of how this was all done.” Considering the number of counterintuitive assessments that we’ve discovered in just a week, that sure seems like a strong possibility.