Recently I was looking at District records for a condo I was interested in. The owner has listed it for sale at $759,000, a mere $17,000 more than he paid in 2005 [basically, he's selling it at a loss when his sales costs are considered]. However, what caught my attention is the District's real property assessment for the condo.
According to the District's database, the property's current full value [before the homestead exemption is applied] is $662,570 and its proposed new value for 2009 is $581,050.
- For 2008, the District values the condo at 10.7% less than its original purchase price;
- It projects a further 12.3% reduction in value during the next year; and
- As far as the District is concerned, the condo has lost 21.7% of its value in three years.
But this is simply one condo in a building of three condos. Is there a trend? What is the District projecting for other, larger buildings? Well, I decided to revisit an old friend, Cityline at Tenley [you may recall my post about the building], to find out. I compared sales data for the building against the District's real property assessment database. I found that of the 188 units that have sold, the assessed value of 68 has increased while that for 120 units has fallen. In other words, the District values 120 units at less than their last sales price, and some by a substantial percentage.
Interestingly, an unscientific sampling shows that no unit with two bedrooms has an assessed value higher than its last sales price. Why? I don't know.
For each unit sold in Cityline, the table below lists the District's 2009 proposed assessment value compared to its last sales price. Use the scroll bar on the right to browse the table.
One may not agree with the District's real property assessment methods and one can argue that the District's proposed assessed value is not really an accurate reflection of market value, but it's important to note that the District is preparing for a large drop in property values since the property taxes that flow as a consequence of these assessments obviously affect the funds available to operate the District in 2009.