{"id":33737,"date":"2018-12-13T15:51:32","date_gmt":"2018-12-13T13:51:32","guid":{"rendered":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?p=33737"},"modified":"2025-04-10T14:33:52","modified_gmt":"2025-04-10T11:33:52","slug":"understanding-the-difference-between-market-value-and-assessed-value","status":"publish","type":"post","link":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/","title":{"rendered":"Understanding the Difference Between Market Value and Assessed Value"},"content":{"rendered":"<p>Though many assume that a property\u2019s assessed value and market value are related, there is often no real correlation. This is due to the fact that they are determined in different ways and for different purposes.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understanding_Market_Value\"><\/span>Understanding Market Value<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>To put it simply, the market value of a home is the point at which the buyer\u2019s willingness to purchase a home meets the owner\u2019s willingness to sell it. A home\u2019s market value can fluctuate based on a number of factors, including available inventory, interest rates, and season.<\/p>\n<p>The market value is an estimate that is created by considering several characteristics of the home including:<\/p>\n<ul>\n<li>Curb appeal<\/li>\n<li>Condition of both the exterior and interior<\/li>\n<li>Lot size<\/li>\n<li>Style<\/li>\n<li>Public utility options<\/li>\n<li>Size<\/li>\n<li>Number of rooms<\/li>\n<li>Quality of construction<\/li>\n<li>Included appliances<\/li>\n<li>Amenities<\/li>\n<li>Type and age of heating and cooling systems<\/li>\n<li>Energy efficiency<\/li>\n<\/ul>\n<p>In addition to the actual house itself, other factors are used to find a reasonable market value. They include the location of the home, recent sales prices for similar homes in the area, and the inventory of homes versus number of buyers.<\/p>\n<p>The market value of a property can be used for several things. When a home is put up for the sale, the listing agent will use the market value to work with their sellers to find a fair listing price. A buyer\u2019s agent is going to estimate market value on their own when advising their client on what to offer. There is no definitive market value; it all depends on what the buyer is willing to pay and what the seller is willing to accept.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Understanding_assessed_value\"><\/span>Understanding assessed value<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The main purpose of a home&#8217;s assessed value is taxation. The assessed value of a home is determined by an assessor. Assessors work for the municipality that will be levying taxes on the property, which is most often the county the property is located in. Assessment standards and criteria vary between tax regions, but they&#8217;re nearly universal principles.<\/p>\n<p>Generally, the assessor will look at the selling prices of similar properties in the area, the property&#8217;s most recent selling price, the value of any improvements that have been done to the home, income generated from the property, replacement costs of property, and other factors. This is then multiplied by an assessment rate, which is a uniform percentage set by each tax jurisdiction, usually 80 \u2013 90%. For example, if an assessor found the value of a home to be $100,000 in a county with an assessment rate of 90%, then the assessed value would be $90,000.<\/p>\n<p>The assessed value is the value on which local government calculates property taxes. It&#8217;s important to note that the main purpose of assessed value is for taxation. Often times, the assessed value and market value will be very different, with the assessed value being lower than what a property would sell for on the open market. For example, if a home was last sold 15-20 years ago, most likely its assessed value will be lower than that of a similar home that sold just two years ago.<\/p>\n<p>Additionally, since assessed value is used to calculate property taxes, a homeowner dissatisfied with their property&#8217;s assessment can generally file a challenge with the local assessor&#8217;s office, which can take the form of tax abatement.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Assessed_value_in_NYC\"><\/span>Assessed value in NYC<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><a href=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/12\/104-W-113th-st-market-value-vs-assessed.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-33954\" src=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/12\/104-W-113th-st-market-value-vs-assessed.png\" alt=\"\" width=\"750\" height=\"588\" srcset=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/12\/104-W-113th-st-market-value-vs-assessed.png 750w, https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/12\/104-W-113th-st-market-value-vs-assessed.png?resize=300,235 300w\" sizes=\"auto, (max-width: 750px) 100vw, 750px\" \/><\/a><\/p>\n<p>In NYC, a property&#8217;s assessed value is determined by the market value&#8217;s assessment rate. The assessment rate, in turn, is dependent upon the property&#8217;s tax class. Properties in tax class 1 can count on a 6% assessment rate, while those in tax class 2, 3 and 4 have a 45% rate applied to assessed value calculations.<\/p>\n<p>Assessed value can increase from year to year, independent from actual market dynamics. However, the legal framework of New York State has limitation for how much assessed values can increase for selected tax classes.<\/p>\n<p>For tax class 1 properties, the assessed value may increase 6% year-over-year, but no more than 20% over a five-year time frame. The assessed value of properties in tax class 2a, 2b and 2c can increase 8% Y-o-Y and no more than 30% over a five-year period. It needs to be noted that this applies to properties with no more than 10 units.<\/p>\n<p>Class 2 properties with 11 or more units and class 4 properties are subject to <a href=\"https:\/\/www1.nyc.gov\/site\/finance\/taxes\/property-determining-your-transitional-assessed-value.page\" target=\"_blank\" rel=\"noopener\">transitional assessed values<\/a>, meaning that 20% of the change is factored in yearly over a 5-year period.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Though many assume that a property\u2019s assessed value and market value are related, there is often no real correlation. This is due to the fact that they are determined in different ways and for different purposes. Understanding Market Value To put it simply, the market value of a home is the point at which the&hellip;<\/p>\n","protected":false},"author":49,"featured_media":33814,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[796],"tags":[11172],"class_list":["post-33737","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-how-to","tag-old-how-to"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Understanding the Difference Between Market Value and Assessed Value - PropertyShark Real Estate Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding the Difference Between Market Value and Assessed Value\" \/>\n<meta property=\"og:description\" content=\"Though many assume that a property\u2019s assessed value and market value are related, there is often no real correlation. This is due to the fact that they are determined in different ways and for different purposes. Understanding Market Value To put it simply, the market value of a home is the point at which the&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/\" \/>\n<meta property=\"og:site_name\" content=\"PropertyShark Real Estate Blog\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-13T13:51:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-10T11:33:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1155\" \/>\n\t<meta property=\"og:image:height\" content=\"770\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Eliza Theiss\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Eliza Theiss\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Understanding the Difference Between Market Value and Assessed Value - PropertyShark Real Estate Blog","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/","og_locale":"en_US","og_type":"article","og_title":"Understanding the Difference Between Market Value and Assessed Value","og_description":"Though many assume that a property\u2019s assessed value and market value are related, there is often no real correlation. This is due to the fact that they are determined in different ways and for different purposes. Understanding Market Value To put it simply, the market value of a home is the point at which the&hellip;","og_url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/","og_site_name":"PropertyShark Real Estate Blog","article_published_time":"2018-12-13T13:51:32+00:00","article_modified_time":"2025-04-10T11:33:52+00:00","og_image":[{"width":1155,"height":770,"url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg","type":"image\/jpeg"}],"author":"Eliza Theiss","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Eliza Theiss","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/","url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/","name":"Understanding the Difference Between Market Value and Assessed Value - PropertyShark Real Estate Blog","isPartOf":{"@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/#primaryimage"},"image":{"@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/#primaryimage"},"thumbnailUrl":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg","datePublished":"2018-12-13T13:51:32+00:00","dateModified":"2025-04-10T11:33:52+00:00","author":{"@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/#\/schema\/person\/de1353a5de72f96494054df3ecca7de4"},"breadcrumb":{"@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/#primaryimage","url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg","contentUrl":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg","width":1155,"height":770},{"@type":"BreadcrumbList","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/2018\/12\/13\/understanding-the-difference-between-market-value-and-assessed-value\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/"},{"@type":"ListItem","position":2,"name":"Understanding the Difference Between Market Value and Assessed Value"}]},{"@type":"WebSite","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/#website","url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/","name":"PropertyShark Real Estate Blog","description":"Market Reports for Real Estate Writers","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/#\/schema\/person\/de1353a5de72f96494054df3ecca7de4","name":"Eliza Theiss","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/96965f7dc4c1c5276e67c2727672b8636c299791a627dca31fda556cf0db9758?s=96&d=retro&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/96965f7dc4c1c5276e67c2727672b8636c299791a627dca31fda556cf0db9758?s=96&d=retro&r=g","caption":"Eliza Theiss"},"description":"Eliza Theiss is a senior writer reporting real estate trends in the US. Her work has been cited by CBS News, Curbed, The Los Angeles Times, and Forbes among others. With an academic background in journalism, Eliza has been covering real estate since 2012. Before joining PropertyShark, Eliza was an associate editor at Multi-Housing News and Commercial Property Executive. She has also contributed extensively to CommercialEdge. Reach her at eliza.theiss@yardi.com","url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/author\/eliza\/"}]}},"jetpack_featured_media_url":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-content\/uploads\/sites\/98\/2018\/11\/market-value-vs-assessed-value_1155x770.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/posts\/33737","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/comments?post=33737"}],"version-history":[{"count":7,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/posts\/33737\/revisions"}],"predecessor-version":[{"id":34060,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/posts\/33737\/revisions\/34060"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/media\/33814"}],"wp:attachment":[{"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/media?parent=33737"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/categories?post=33737"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.propertyshark.com\/Real-Estate-Reports\/wp-json\/wp\/v2\/tags?post=33737"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}