From Floor to Ceiling
Last year, 90% of you were in the top 10% of your class. Today, 90% of you are in the bottom 90% of your class.
–Stanford Dean of Admissions Fred Hargadon, to each incoming class at freshmen orientation
Five years ago, if a home’s tax assessed value was relevant at all in establishing fair market value, it served as a floor.
At least in the Twin Cities, tax assessed value frequently serves as the ceiling.
And for homes that need significant updating and/or have been off the market for decades, the tax assessed value can be little more than wishful thinking.
That’s because, year after year, the taxman presumes that a given home is keeping up with its peers.
If instead the home is standing still — or worse, accumulating deferred maintenance — the gap between fair market value and tax assessed value can be sizable.
P.S.: Why don’t more homeowners challenge their tax assessed value?
Especially the last couple years, they do.
But I suspect that for at least some older homeowners, seeing their tax assessed value climb year after year (at least until recently), is a badge of pride and honor — albeit an expensive one.