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Is Your Madison WI Property Assessment Out of Whack?

Posted by Jolenta Averill on Monday, January 26th, 2009 at 10:14pm.

photo5That old joke about how your tax assessor views your property may be more true than you realize...

In a recent conversation with City of Madison Assessor's Office I was struck by two things: One, the fact that the office of the City Assessor of Madison does not have unfettered access to the South Central Wisconsin MLS (apparently they they have access to Sold listings but do not have access to Active, Pending and Expired listings). And two (and perhaps more surprising), that in valuing properties for the purpose of determining homeowners' annual property assessments, the City doesn't use certain recent comparable solds. Which recent comps, you might ask? Well, recent comps deemed by the City to have been "sold under duress" as in, you guessed it, short sales and foreclosures.

Huh? I had to ask several times before I was convinced I hadn't misunderstood. How exactly is the City able to determine what constitutes duress? Presumably they weren't involved in all these transactions so how can they draw such conclusions? Although advertised short sales or foreclosures might seem like obvious cases of duress, what about a divorce, an estate or an over-eager buyer? And what about market efficiency? Markets intervene to ensure properties go to the highest bidder. Case in point: two weeks ago I got an accepted offer on a Madison West Side REO and it was one of SIX offers they'd received that day. That's the most competition I've ever in securing an accepted offer! (And all we hear is that the market is slow.) But according to the City, that comp won't be used when it comes time to reassess the homes in that neighborhood. Why, when the market is so competitive would such data be discarded? And at what point does the City stop ignoring that data, when there are no more comps left that don't involved duress?? It's not like there's a lot of speculative selling going on these days. I mean it's no secret these days that if you don't have to sell, you're generally not selling. 

While day in and day most Realtors go about their business objectively pricing and selling homes based on recent comparable sales data, why are city administrators valuing properties using incomplete data and subjective thinking? If city workers ignore the lower-priced sales, doesn't that automatically produce higher property assessments despite declining markets?

To try and better understand all things property tax related, I recently added a page to my Madison WI real estate site about Madison property assessments and mill rates based on information from the City Assessor's Office. There's no mention of the above valuation techniques on the city's website but I'm not making up what they told me. And while I disagree with the City's methodology, I recognize that the job of valuing every piece of residential, commercial and income property (including equipment in the case of office buildings) in the city every year is undoubtedly an extremely difficult task, at best. Still, I'm disturbed by these revelations and thus encourage Madison homeowners to take a long, hard look at their property assessments this April 20th. And if you're curious whether you might have reason to challenge your assessment, give me a call or email me. I'd be happy to run the comps (all of them!) and let you know if the data supports a case for your assessment to be lowered. 

Hi, and welcome to our Madison real estate blog. Whether you're a consumer, journalist or Realtor, we encourage you to share your thoughts by leaving a comment. Here you'll find relevant local and national real estate information, as well as market statistics, insight, and information about a variety of neighborhoods and real estate listings. If you'd like more information about anything in particular, please use the contact form and I'll be happy to help.

Jolenta Averill, Principal
Lake & City Homes Realty
(563) BUY-SOLD

2 Responses to "Is Your Madison WI Property Assessment Out of Whack?"

Kathie Free wrote: <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body><p>Thank you for this blog entry. It is very informative. However, I have a different problem. The City of Madison Wisconsin has dropped the value of our condos in East Bluff by forty-five percent (45%) in four years. No one has inspected my condo in over four years. We are still paying close to the same amount in taxes. I want so much to leave this god awful city but cannot because I am now seriously under water. Do I have any recourse?</p></body></html>

Posted on Friday, April 26th, 2013 at 6:39am.

Jolenta Averill, Broker wrote: <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body><p>Kathy, You can contest your assessment with the City of Madison. There is a procedure for doing so documented on the City of Madison website. Please note that the deadline to file assessment objections is May 13th at 1:30pm. Here is the link to the assessor calendar: http://www.cityofmadison.com/assessor/assessmentDates.cfm On the other hand, if you are interested in selling so you can get out of the area, you are probably not going to want to lower your assessment since that is still one measure of valuation that a lot of buyers look at in addition to recent sold comps. I've also emailed you with more information specific to your property's valuation. Best of luck, Jolenta</p></body></html>

Posted on Thursday, May 9th, 2013 at 10:38am.

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