Does assessed value have any bearing on market value?

The short answer is no.

We measured data from the South Central Wisconsin MLS to take a closer look at the relationship between the assessed value and the selling price for homes in Madison. The results show that during the years 2000 to 2005, roughly 90% of all Madison homes sold for above the assessed value. However, this relationship started to change in 2006, and in 2007 only 56% of all Madison homes sold for above the assessed value.

The bar chart below shows how the relationship between assessed value and market value has changed over time. The blue bar represents the percent of Madison homes that sold for below the assessed value. The purple bar represents the percent of Madison homes that sold for above the assessed value.

We drilled deeper into the 2007 data for Madison homes and uncovered the following:

• 26% of all homes sold for a price that was at least $10,000 lower than the assessed value.
• 44% of all homes sold for a price that was within $10,000 (above or below) of the assessed value.
• 32% of all homes sold for a price that was at least $10,000 above the assessed value.
  
  
  
  

What does this data mean for you?

If you're selling your home, you can't rely on the assessed value as a reliable measure of market value. You or your real estate professional need to research the market in your neighborhood to establish the proper market price.

If you're buying a home, realize a list price above the assessed value doesn't mean a home is over-priced, and a list price below the assessed value doesn't mean a home is priced at a good value. Same as above, you or your real estate professional need to research the market in your area of interest to determine the market value of a particular home.

For more information, read our articles on market value versus assessed value and pricing your home, both at DaneCountyMarket.com.