bostonbubble.com

[Brian C]

What are your feelings when it comes to valuating sale price vs current assessment? Do you feel like your getting a good deal if you get your property under assessment? Houses that are way over (10+%) assessment, do you skip over them completely because of the increase tax costs?

How is the market doing with the sale price compared to the assessed value?
Well I did some quick numbers from April 1st to April 9th (today) with houses that went pending since the number of "sales" between this time period was only 10-12 properties.

18 properties ranging from 300k to 500k, pending sales price was averaging 9.73% below assessed value. With some properties 51% and 53% below and 17% and 19% above assessed values. This area is 5 MetroWest towns.

[john p]

This is the way I'd look at this.

Find out the year that the assessor based their assessment. If it was in 2005, the chance is the evaluation year overstates current market prices. However, the tax rate would be lower. Keep this in mind, whatever the taxes were for the property last year, the property taxes shouldn't go up that much from year to year due to Prop. 2 1/2 which was meant to keep the Operating Budgets and Capital Aritcles within 2 1/2 percent increases year over year.

The catch is whether the price segment you're looking at within the town has changed. Say 4 square colonials are holding value and capes and ranches are dropping, you might have to pay for a larger share of the tax burden because of the reevaluation within the town's housing stock.

Some people think that it is better to have a smaller house in an expensive town because you get better services because the richer folks are paying more of the freight and tax rates drop. In some instances a house in a more expensive town might be a better deal if it is $30-$50k more because the tax rate is lower. So, depending on the price point within the town, you could do better or worse.

Also, if a town has no discipline with regard to spending, it could be a long term bad investment, so steer clear from that if your research shows you this.