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Welcome. This site will examine the property assessment practice in New York State. Currently the method applied is Market Value (MV)1-2. Market Value also called comparable Value (CV). Discussion includes “The application of appraisal techniques using the three approaches to value (i.e., cost approach - basis3, direct sales comparison approach4, and income capitalization approach5 ) will develop separate indications of value for the property.” Income Capitalization is a valuation method appraisers and real estate investors use to estimate the value of income producing real estate. Thus will not be discussed here. Two of these will be compared, Market Value (MV) and cost approach - basis (CA). For legitimate comparison application of research methods is appropriate which includes sample size6, validity7, and reliability8. While this is somewhat technical, the defining criteria are now set. The writing in this document while quite detailed is necessary for those not as familiar with assessment procedures. Argument to follow is that MV-CV is an invalid measuring standard, while CA meets standard research methods. Data tables in a later section will illustrate gross variations of nearly identical properties. CA standards as well are documented and exist in current assessment procedures(law), a strategy is introduced in this document to change from MV to CA. Important: Each headline topic opens in a new window. Thus while each link appears to function, moving around opens many windows. I suggest opening each topic once, then switching between windows with your browser. I did have a problem with Internet Explorer finding this site and am unsure why. I have only tested with IE 7 and firefox. Please report problems. rr12827@hotmail.com thanks. The Charts in this presentation, at first seem confounding, except this data is the essence of the argument. Please take some time to acquire the skill to read them. They examine 2008 -2009 data in both length and width measurement and in acreage. Both methods ought to provide equal amounts. As can be seen these figures vary widely. Charts are organized to emphasize differences between the years and the measurements. A number of plots do not contain data on all four measures because they are not supplied in the county data. 1. http://www.propex.com/C_f_glos_fn.htm#M Market Value “The most probable price a property will sell [1] after reasonable market exposure in a competitive market, [2] under all conditions requisite to a fair sale, [3] buyer and seller acting knowledgeably/prudent and for their self-interest, [4] neither buyer or seller is under undue duress, [5] with cash, cash equivalent terms, or with typical market financing. Market value may is not always the price a property actually sells for nor is it the highest price paid. It is defined in the concept of a typical buyer and willing seller.” 2. http://www.orps.state.ny.us/assessor/valuation/valstdsm.htm#real Section III Approaches to Market Value 3. http://www.propex.com/C_g_cost.htm The Cost Approach is based on the principle of substitution which asserts that no prudent buyer or investor will pay more for a property than that amount for which the site could be acquired and which improvements that have equal desirability and utility can be constructed without undue delay. It is a method of appraising property based on the depreciated reproduction or replacement cost (new) of improvements... 4. http://www.realtown.com/words/direct-sales-comparison-approach Direct Sales Comparison Approach A method of appraising or valuing real property based on the principle of substitution (comparison). The appraiser using this method estimates the value of property by comparing the prices paid for similar properties and concludes the value accordingly. 5. http://www.propex.com/C_g_inc.htm Income Capitalization is a valuation method appraisers and real estate investors use to estimate the value of income producing real estate. 6. http://edis.ifas.ufl.edu/PD006 Perhaps the most frequently asked question concerning sampling is, "What size sample do I need?" The answer to this question is influenced by a number of factors, including the purpose of the study, population size, the risk of selecting a "bad" sample, and the allowable sampling error. 7. http://writing.colostate.edu/guides/research/relval/com2b3.cfm validity, also referred to as instrumental validity, is used to demonstrate the accuracy of a measure or procedure by comparing it with another measure or procedure which has been demonstrated to be valid. (Basically does the data actually measure the desired parameter.) 8. http://www.socialresearchmethods.net/kb/reliable.php Reliability has to do with the quality of measurement. In its everyday sense, reliability is the "consistency" or "repeatability" of measurements. |