Tuesday, November 13, 2018

A Ratio-based Spatial Graphic is a Good Starting Point to Analyze Assessment Equity

(Click on the image to enlarge)

Since the Median Countywide Sales Ratio points to a ratio of .80, all Towns in this County must be valued close to this ratio (assuming, of course, a countywide uniform assessment statute) so that the Assessment Roll becomes fair and equitable.

While one would expect to see all Blue and Green balloons (legends on top right) on the spatial chart above, many Red and Yellow ones - even side by side - exist, indicating the presence of some seemingly serious under and over-assessed parcels. This scenario is quite normal as - more often than not - similar properties in the same neighborhood do not necessarily sell for the same price, which, in turn, introduces (visual) conflicts amongst individual ratios.

That is why Town-wise statistical summaries are always better front-line indicators. Of course, if an arms-length subject sale significantly deviates from its Town's, it may require a re-examination.    

Obviously, sales must be individually validated and the outliers removed from the sales universe. Better yet, those sales should then be modeled (AVM applied) and the resulting model-defined outliers removed as well, thus paving the way for a more scientific universe of ratio-eligible sales.

I picked the above graphic from TownAnalyst.com as I own and operate it, to avoid having to deal with any copyright issues. My TownAnalyst site is totally free (no strings) and requires no login or registration whatsoever. Please use the assessment evaluation system that works best for you.


Disclaimer: This analysis is strictly illustrative. Any commercial and.or legal use of it is totally prohibited.  Always consult a Tax Attorney on statutory requirements.

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