Assessors strive to produce fair results

It's important for assessors and commissioners to do a reassessment right.

Their job is to determine the fair-market value of real estate -- and that matters to property owners, because it is one of the two factors that determine their real estate tax bill.

Assessments are supposed to be an impartial estimate. It's the other piece -- the rate at which property is taxed -- that's a political decision.

To make sure everyone pays a fair share of a locality's tax burden, assessors need to be sure everyone's property is assessed the same way.

The first step for an assessor or commissioner of revenue is to look at property sales.

Hanover Assessor John W. Nelms Jr. set new values on about 10,000 pieces of property, or about 23 percent of the total, in the county's latest reassessment. He said the key is to compare sales prices to assessed value.

For instance, in North Macon Terrace, a subdivision of 46 homes in Ashland, he looked at seven recent sales and found that half of them were for prices that were 101 percent of the property's assessed value.

"In nebulous times like this, you don't really want to be that tight," he said.

When he and his staff determine an assessment, they are estimating a fair-market value for the next 12 months, and the trend is down.

He wanted to aim for assessments that would bring the median figure for recent sales down to the mid-90 percent range. In doing that, he wanted to make sure that each property's assessment reflected the differences in the homes and kept values within the neighborhood in line with each other.

A Richmond Times-Dispatch review found that assessed values in the neighborhood fell an average of 6.6 percent.

There were seven sales in the past 18 months at prices ranging from 94 percent to 104 percent of the 2008 assessment. The new assessed values for those homes ranged from 87 percent to 97 percent of the sales price, with the smallest percentage for houses that sold in 2007.

In all, 38 of the 46 properties' assessment changes were within 1 percentage point of the neighborhood average, The Times-Dispatch analysis found.

Nelms uses a statistic measure called a coefficient of dispersion -- basically measuring how wide the range of values is -- to make sure the changes are fair. The smaller the figure, the smaller the range, corrected for all the differences in the houses themselves.

The smaller the figure, the better. The International Association of Assessing Officers says a 10 percent coefficient means a good, fair assessment. In North Macon Terrace, the coefficient came in a 1.24 percent.

Another way of checking is to look at land values. On North Macon Terrace, where lot sizes are all pretty much the same, so are land values.

"Run down the column and its 52, 52, 52," Nelms said, referring to values in the $52,000 range.

"Everybody reads all the stories about real estate prices, but it's really not happening in Hanover County," Nelms said. "It's not Miami, it's North Macon Terrace."

Contact David Ress at (804) 649-6051 or .