My answer in 2023, with 2024 updates

Assessments are not a reflection of market value. They are a backward-looking assessment of what the market value may have been at the time the assessor looked at the house (most likely online, and not in person). The assessor may or may not know the condition of the property, the condition of the property’s neighbors, may not consider the traffic noise, crime stats, proximity of sexual offenders, level of inventory, smell of the neighborhood, etc. etc. etc. Assessments are why you pay taxes on. (that’s from 2011, and it’s still accurate)

Charlottesville’s assessments are up 5% and Albemarle’s up 4%. A client texted me this morning from the City saying he’s going to challenge his for this first time (I think he’s been there for ~10 years).

I got curious, so I looked for single family homes sold in Albemarle and Charlottesville since 1/31/24, not new construction. Clearly, this is not sufficient statistical sampling, but curiosity.

• Sold for $1,235,000. Assessed for $980K (County)

• Sold for $852K. Assessed for $934K (County)

• Sold for $600K. Assessed for $494K (City)

• Sold for $550K. Assessed for $551K (City)

I wrote this last year.

Assessments go up. Assessments go down. …

A few thoughts on real estate assessments:

• Virginia Code says that real estate assessments are supposed to be 100% of fair market value. In reality, sometimes assessed values are higher than market value, sometimes lower, sometimes close enough to be considered accurate.

• Assessments are a backward-looking valuation, and given the recent market shift, the value that was placed on a house today, looking at yesterday’s data, might be inaccurate. This was the case also when assessed values and market values were declining.

• One key point is that people using Zillow’s zestimate as an argument, for or against an assessment, are using a completely not transparent, often not accurate, valuation, that often will necessarily shift much faster than assessed values.

• I don’t remember people complaining about declining assessed values as vociferously as they are complaining about increasing ones. I’ve seen discussions on Twitter, Reddit, and Nextdoor (god help me).

• If your assessment feels off, ask me. I would be happy to run some quick comps for you to help you get a better feel as to whether appealing would be reasonable. I believe the appeal process is free.

• Real estate property assessments pay for our schools. In Albemarle County, 50 % of the budget goes to schools, and 42-47% of that comes from property taxes.

• Real estate assessments directly affect localities’ budgets. Simple.