DUMB QUESTION ALERT: Why is property value so delicate?(Slight rant)

This is a honest question and I have done my research but still confused. I ask why is it so delicate in the sense it is influenced MORE by other things beside the value itself of the home. Here is an example, in a specific suburb they use the term fair cash value of the property to determine property tax. The property value(the specific word they use is fair cash value) is going up stupid amounts and no extra work has been done to the house. I understand there is a term of market value, fair market value,and fair cash value. When speaking to elected officials they keep saying the property value is influenced by other properties and how much they sold which is the market value. The reason I find this concerning is families getting priced out of their own home.

I ask my question because it confuses me. Here is an example I like to use to try to understand values of things. Let’s say I own a store and I sell milk for 5 dollars after considering the costs of supply chain and such. My price will fluctuate depending on the supply chain costs and thus is dependent on that and I have a choice to sell the milk for however I want. Let’s bring it back to the housing market. I understand it is apple to oranges but the concept is similar. As being an owner of a house(or store in my analogy)I look at the supply chain of my own house aka additions, renovations, or costs of maintenance. Based on that I should be able to have a CHOICE to sell as I please based on what I would consider is a fair value and the amount I bought it for would be a standard to use.

The fact assessors have such a strong say in X person’s property value is concerning because that influences the property tax heavily. In my parent’s house that is super old, the tax rate went down but the value of the property went up like 150k in the past 5 years. No renovations and it is purely because houses around sold for alot more. I understand one can say “they can sell and move out” but most families and elderly people buy a house with the intention to stay in it long term. Not everyone has the real estate mindset to buy a house to sell with a profit. That being said,why is the property value so dependent on how much other houses sell and how dependent is it? If 10 houses sell for lets say 100k,200k,300k, and etc, what would be the exact algorithm used to determine the fair cash value of a house?

I apologize for the rant and I am genuinely curious what is the general idea of this? Housing in my state is going up ridiculous amounts to the point it doesn’t make sense. I was looking at data for my area and it dipped in 2015 where it was affordable for a typical family of 4 making a total of 80k a year and now its not even possible with a 6 figure job. I appreciate any response!

edit; My gripe at the end of the day is people paying property taxes on a home value that increased a stupid amount. It would be fair if the family living in X household paid property tax on the value they bought it for. Most families buy a house that is in their budget including the property tax. The fact that the property tax is going up stupid amounts as a direct cause of property value increase stupid amounts as well is putting many families at risk to even live.

submitted by /u/romanssworld
[link] [comments]

This is a honest question and I have done my research but still confused. I ask why is it so delicate in the sense it is influenced MORE by other things beside the value itself of the home. Here is an example, in a specific suburb they use the term fair cash value of the property to determine property tax. The property value(the specific word they use is fair cash value) is going up stupid amounts and no extra work has been done to the house. I understand there is a term of market value, fair market value,and fair cash value. When speaking to elected officials they keep saying the property value is influenced by other properties and how much they sold which is the market value. The reason I find this concerning is families getting priced out of their own home. I ask my question because it confuses me. Here is an example I like to use to try to understand values of things. Let’s say I own a store and I sell milk for 5 dollars after considering the costs of supply chain and such. My price will fluctuate depending on the supply chain costs and thus is dependent on that and I have a choice to sell the milk for however I want. Let’s bring it back to the housing market. I understand it is apple to oranges but the concept is similar. As being an owner of a house(or store in my analogy)I look at the supply chain of my own house aka additions, renovations, or costs of maintenance. Based on that I should be able to have a CHOICE to sell as I please based on what I would consider is a fair value and the amount I bought it for would be a standard to use. The fact assessors have such a strong say in X person’s property value is concerning because that influences the property tax heavily. In my parent’s house that is super old, the tax rate went down but the value of the property went up like 150k in the past 5 years. No renovations and it is purely because houses around sold for alot more. I understand one can say “they can sell and move out” but most families and elderly people buy a house with the intention to stay in it long term. Not everyone has the real estate mindset to buy a house to sell with a profit. That being said,why is the property value so dependent on how much other houses sell and how dependent is it? If 10 houses sell for lets say 100k,200k,300k, and etc, what would be the exact algorithm used to determine the fair cash value of a house? ​ I apologize for the rant and I am genuinely curious what is the general idea of this? Housing in my state is going up ridiculous amounts to the point it doesn’t make sense. I was looking at data for my area and it dipped in 2015 where it was affordable for a typical family of 4 making a total of 80k a year and now its not even possible with a 6 figure job. I appreciate any response! ​ edit; My gripe at the end of the day is people paying property taxes on a home value that increased a stupid amount. It would be fair if the family living in X household paid property tax on the value they bought it for. Most families buy a house that is in their budget including the property tax. The fact that the property tax is going up stupid amounts as a direct cause of property value increase stupid amounts as well is putting many families at risk to even live. submitted by /u/romanssworld [link] [comments]

<a href="Read More“>View Full Article

Need More Commercial Real Estate Leads?SAVE 40% this month!

Our commercial valuation calculator was created to evaluate commercial real estate. In 6 quick steps you will know your NOI, CAP RATE, and IRR.

Now you can get your own branded version of our calculator!