Taxable Value and "True" House Value
My question is: on the average, does the taxable value of a house reflexes the "true" value, assuming no improvement is made after the last inspection? I mean, the State will raise real estate tax as soon as she can and as much as she can. Many states are already using huge traffic fine to make up for their lost in investments, WA cannot be too far behind.
To get some ballpark numbers, I did a spreedsheet with the following columns:
- A: year
- B: Seattle Median Home Price
- C: King County Median Income (Don't have numbers for Seattle, KC is close enough)
-
Average Interest rate
- E: Affordable Ratio (function of D. See http://www.benengebreth.org/archives/20 ... riceto.php)
- F: Affordable Home Price ( C x E)
- G: Bubble % (B - F)/F
Starting from 1990, the curve of B matches F until 2005. By 2007 B is 25% above F. So it seems Seattle homes were affordable until 2005.
Since B and F matches pretty well between 1990 - 2005, I tend to believe that this "Affordable Home Price" for a given year is the "true" price for that given year.
Say if a house is sold for $355k in 2003, the model says its "Affordable" price is $433k in 2007 and $472k in 2008, assuming 3% annual income increase between 2006 and 2008 and no home improvement is done to it after 2003. Interestingly the taxable value of the house values seem to match this "Affordable Home Price" very well.
But others disagree. Zillow thinks much more highly of the Seattle housing price than WA state and the sellers think even more highly of their home values than Zillow does.On the average, asking price on the houses I am tracking is 5% above the Zestimate and 36% above their taxable value.
Am i missing something while eating my popcorn?
To get some ballpark numbers, I did a spreedsheet with the following columns:
- A: year
- B: Seattle Median Home Price
- C: King County Median Income (Don't have numbers for Seattle, KC is close enough)
-
Average Interest rate- E: Affordable Ratio (function of D. See http://www.benengebreth.org/archives/20 ... riceto.php)
- F: Affordable Home Price ( C x E)
- G: Bubble % (B - F)/F
Starting from 1990, the curve of B matches F until 2005. By 2007 B is 25% above F. So it seems Seattle homes were affordable until 2005.
Since B and F matches pretty well between 1990 - 2005, I tend to believe that this "Affordable Home Price" for a given year is the "true" price for that given year.
Say if a house is sold for $355k in 2003, the model says its "Affordable" price is $433k in 2007 and $472k in 2008, assuming 3% annual income increase between 2006 and 2008 and no home improvement is done to it after 2003. Interestingly the taxable value of the house values seem to match this "Affordable Home Price" very well.
But others disagree. Zillow thinks much more highly of the Seattle housing price than WA state and the sellers think even more highly of their home values than Zillow does.On the average, asking price on the houses I am tracking is 5% above the Zestimate and 36% above their taxable value.
Am i missing something while eating my popcorn?