Happy New Year to all! As we contemplate the challenges ahead, we focus too on the opportunities that this New Year will offer us. And yes, I believe that both will abound. The recent arrival of the July 2016 Property Tax Assessment notices has made me think of the science (or is it a creative art?) of valuing homes.
Firstly, if we accept the market value in any given period is the amount that a willing seller would accept from a willing buyer then this task should be a relatively simple one. Asking prices, or list price as it is generally termed, is the estimate arrived at by the “wannabe” seller and their advisor, usually a Realtor. We know from experience, that can be set at a level way higher or way lower than the ultimate sale price. Now consider a recent article in the Vancouver Sun dealing with assessment vs market value. Examples of homes with addresses showing their (new) assessment values were provided. In each case the words “is selling for” and a specific dollar figure is given. This terminology (a pet peeve of mine) is not new and is clumsily used by some to refer to the asking or list price. I researched these examples and despite the misleading inference, found that not one that I looked at had in fact been sold and all had been on the market for between 11 and 69 days. Oh yes, and 2 of these are either cancelled or expired indicating they were likely overpriced.
So we see that the creation of one estimate, for Assessment purposes, is being compared with another estimate, Asking price. Hardly of real value. It is this type of reporting that misleads readers into believing erroneous information about the market. Care is also necessary when terms such as ‘sales’ might imply number of units or the sale prices. As my grade 8 English teacher would have said “beware of sloppy terminology”.