Understanding assessed vs. market value in the Revelstoke real estate market

What is the relationship between assessed value and market value? Is comparing them apples fruitful? We use comparison as a tool to gauge one thing against another, and this is done a lot with market and assessed values. But, should it be? Does purchasing a property at a higher-than-assessed-value necessarily mean it’s a bad thing? Nope. 13 of the 19 home sales in downtown Revelstoke were sold at a price higher than their assessed values. What does that mean? Well, nothing really except that they were likely sold more times in the past than the properties that were assessed for less. Comparing these stats in general is a great tool to get the bigger picture, but shouldn’t be a major determining factor used as a basis for an offer or list price.

To further explore this, think of the assessed value as the tax value. Every year BC Assessments (BCA) sends out the assessment notice which determines an owner’s property taxes. The amount owing is calculated as a percentage based on criteria like size, age, location and construction materials. BCA is not required to make adjustments for the ever-changing market value.

The market value is determined by looking at much of the same criteria used by BCA, but a Realtor^® also takes other factors into consideration such as the finer details of a home, both interior and exterior and also very importantly, any recent comparable sales. If a home has not been sold in a long time, it’s likely that the assessed value will be much lower until BCA receives the new sale information and updates their records.

Don’t let the numbers sway you if you’re looking at property with a market value that is higher than the assessed value. This becomes good news when you get down to the brass tacks … lower property taxes.

A system doesn’t exist today to generate a report which compares the two, so we have to look up each sale price and assessed value per property individually. So I did just that using 2015 sales in the downtown core.

As a side, I included the average sale prices as well and found that the average sale price came in $50,000 lower for homes downtown versus all of Revelstoke. This was due to a number of downtown properties being sold through an estate sale that are in need of upgrades. It was providential to coincide with the first-time home buyer surge, giving an opportunity for new home owners to earn some sweat equity. Keep an eye for the new life being brought to these downtown properties in the days ahead!

The average Sale Price downtown was $275,640

The average Assessed Value downtown was $250,532 = a $25,108 spread.
The average Sale Price for all of Revelstoke in 2015 was $327,912.
The average Assessed Value, I’ll have to get back to you on.

Below are the numbers comparing the Sale Price and the Assessed Value of 19 Single Family Residential sales in Downtown Revelstoke from Jan 1, 2015 to date:

Sale $	Assessed Value	$ difference	% difference
$ 130,000	$209,700	-$79,700	-38%
$ 155,000	$187,900	-$32,900	-18%
$175,000	$192,500	-$17,500	-9%
$168,000	$184,500	-$16,500	-9%
$279,000	$300,000	-$21,000	-7%
$225,000	$241,700	-$16,700	-7%	6 sold under assessed value
$288,000	$282,000	$6,000	2%
$269,000	$260,500	$8,500	3%
$340,000	$324,000	$16,000	5%
$309,000	$273,400	$35,600	12%
$389,000	$331,000	$58,000	15%
$367,500	$306,000	$61,500	17%
$275,000	$228,300	$46,700	17%
$348,000	$286,000	$62,000	18%
$271,651	$222,400	$49,251	18%
$320,000	$260,000	$60,000	19%
$229,000	$180,200	$48,800	21%
$299,000	$224,000	$75,000	25%
$400,000	$266,000	$134,000	34%	13 sold over assessed value