How do I know my assessment reflects fair market value?

Also known as Assessment to Sales Ratio Analysis

Assessing property is not an exact science.  This is typically a mass estimating process, not individual property appraisals. Assessments are considered to be a good estimation of fair market value if they are reasonably close to the sale prices within any given neighborhood.  The acceptability of values is measured by the Assessment-to-Sales Ratio (ASR). The ASR is derived by dividing the assessed value by the selling price.

Given the size, complexity and diversity of properties within Fairfax County, fair market value is deemed to be reasonably estimated if assessments at the neighborhood level generally average in the low-to-mid-90 percent range when compared to sale prices. If the relationship between assessments and sale prices for a given neighborhood falls below this range, assessments normally need to be raised. If the Assessment-to-Sales ratio is significantly above this range, assessments may need to be lowered.

Hypothetically, the ASR for a given area may have been around 95% as of January 1, 2016 (comparing 2015 sales to the 1/1/16 assessment).  If sale prices rose significantly during calendar year 2016, and the assessment remained unchanged, the ratio would decrease. This would suggest that assessments for 1/1/17 need to be adjusted upwards. Similarly, if prices dropped during the year, and assessments remained the same, the ratio would increase. This would suggest that assessments for 1/1/17 need to be adjusted downwards. As indicated on the notice, necessary value adjustments are determined by analyzing actual sales, and these are then applied to other comparable properties within the neighborhood, both sold and unsold. The reasonableness of assessments is then measured using the ASR statistics.

It is important to note that the ASR is measured at the average neighborhood level. Ratios for individual properties may be higher or lower depending on the date of the sale and the pace at which the market is changing. The ASR is calculated based on the neighborhood median of sales that occur throughout the prior year, and assessments will lag the 2016 sales market. 

DTA appraisers may also conduct site inspections as required, including permit follow-up and upon appeal. Additionally, staff systematically examines property physical characteristics by site visits or reviewing oblique and aerial photography so that one-sixth of the county is examined in detail annually. Site visits help maintain accurate property records and in the analysis of comparable properties. Staff supplements this by contacting sellers, buyers, real estate agents and builders to validate individual sale transactions. Staff also reviews sales listings.

Example of Assessment-to-Sales Ratio (ASR) prior to reassessment:

  1/1/2016 Assessment Sale Date Sales Price A/S Ratio
Sale 1 $420,500 01/06/2016 $462,596 0.909
Sale 2 $446,500 03/01/2016 $480,108 0.930
Sale 3 $512,000 05/15/2016 $538,947 0.950
Sale 4 $452,100 07/16/2016 $507,978 0.890
Sale 5 $444,500 09/15/2016 $509,748 0.872

Neighborhood Average prior to reassessment: 0.91

Looking at comparable sales and in looking at cost data, DTA appraisers estimate fair market value as of January 1, 2017. The reasonableness of these estimates is then tested by again calculating the ASR, this time using the new assessed values.

Example of Assessment-to-Sales Ratio (ASR) after reassessment:

  1/1/2017 Assessment Sale Date Sales Price A/S Ratio
Sale 1 $441,000 01/06/2016 $462,596 0.953
Sale 2 $456,500 03/01/2016 $480,108 0.951
Sale 3 $514,400 05/15/2016 $538,947 0.954
Sale 4 $482,000 07/16/2016 $507,978 0.949
Sale 5 $480,500 09/15/2016 $509,748 0.943

Neighborhood Average after reassessment: 0.95


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