{"id":1119941,"date":"2021-03-08T12:00:06","date_gmt":"2021-03-08T20:00:06","guid":{"rendered":"https:\/\/www.esri.com\/arcgis-blog\/?post_type=blog&p=1119941"},"modified":"2021-09-02T05:59:16","modified_gmt":"2021-09-02T12:59:16","slug":"insights-for-tax-assessors","status":"publish","type":"blog","link":"https:\/\/www.esri.com\/arcgis-blog\/products\/insights\/analytics\/insights-for-tax-assessors","title":{"rendered":"Location, Location, Location: Property Valuation & The Analytics Grounding It"},"author":6051,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"_searchwp_excluded":""},"categories":[23341,22841],"tags":[635361,407352,173722,33491,758952],"industry":[],"product":[36801],"class_list":["post-1119941","blog","type-blog","status-publish","format-standard","hentry","category-analytics","category-local-government","tag-assessment","tag-land-records","tag-local-government","tag-parcels","tag-tax","product-insights"],"acf":{"short_description":"ArcGIS Insights makes Property Assessor's jobs easier and bring a new level of accuracy to existing workflows.","flexible_content":[{"acf_fc_layout":"content","content":"

There are countless professionals behind the scenes working hard to ground-truth home values and ensure that property values are fair, equitable, and uniform.\u00a0 These are the property assessors, tax assessors, property appraisers, and auditors working for your county, city, town, or even state.\u00a0 Tax assessors’ offices are tasked with, well assessing property.\u00a0 These assessment professionals work to put a fair market value on real estate. For many people it is their single largest asset.<\/p>\n

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\u201cOur job is to value real property at 100% of market value while maintaining equity and ensuring the credibility of our valuation program.\u201d<\/em> –\u00a0Lynn Longfellow, Appraisal Manager, Clackamas County Oregon<\/p>\n<\/div>\n

Every local government interprets state statues and has developed their own process and way of calculating assessments. But at the end of the day they\u2019re ultimately all trying to answer the same difficult question: How do we fairly assess property within the statutes, standards, and industry practices?<\/em> These property assessments determine the tax a property owner will pay, and it is used to finance education, infrastructure, public safety, and other services that benefit the community and make our life nice.<\/p>\n

Even though the thought process on how to properly value property might differ from community to community, there are several key common analyses: the sales ratio study, outlier analysis, tax roll closure, neighborhood realignment, and others.\u00a0 The list goes on, but we’ll focus on just a few for this article.<\/p>\n"},{"acf_fc_layout":"content","content":"

Incorporating the Spatial Component<\/strong><\/span><\/h1>\n

Often assessors and appraisers work with spreadsheet upon spreadsheet of data, comparing property characteristics to guide them neighborhood by neighborhood. It is a long and arduous process with countless hours spent pouring over the data before assessments can even be made.\u00a0 Even then, a site visit is often required to make sure a property in question is aligned well with the data. If property characteristic data is inaccurate or incomplete, inaccurate assessments result. Similarly, a lack of a location data component during the analysis can make an already complex process take more time, effort, and resources.<\/p>\n

ArcGIS Insights is an analytics tool that allows you to explore your property valuation data with the location considered up front during the analysis.\u00a0 Insights can help you work through these questions.<\/a> Think about how valuation with a spatial component can help improve and speed the process, and understand how a property fits into a particular neighborhood. More importantly, it improves the quality of property valuations and provides property appraisers access to current property characteristics and neighborhood trends, ensuring that property is valued fairly and equitably while helping reduce appeals.<\/p>\n

So how do tax assessors determine your home\u2019s value?\u00a0 And how do they do it for the thousands of other homes in your town?\u00a0 After working with a few of them, here are some take-aways that we\u2019ve discovered.<\/p>\n

In the following sections let\u2019s explore some tools for making sense of the spreadsheet upon spreadsheet of data used to assign property valuations. Let’s look at this data in new ways.<\/p>\n"},{"acf_fc_layout":"content","content":"

Sales Ratios<\/strong><\/span><\/h1>\n

Assessors work to value property at the most likely selling price, known as the assessed value. When this assessed value is compared to the actual sale price, it\u2019s a strong indicator of the assessor\u2019s estimation quality as well as market trends.<\/p>\n

A Sales Ratio study formally compares assessed values to sales values. Specifically it analyzes the relationship of assessed value to market value expressed as a percentage. The goal is to investigate how sales ratios range across an assessment neighborhood as a quality and compliance check. Year-over-year measurements are compared for overall accuracy, uniformity, and fairness. The ratio is calculated by dividing the assessed value by the sale price (or market value) of a property.<\/p>\n

Sales Ratio = (Assessed value\/Market value)* 100<\/em><\/p>\n

Once the ratio has been calculated, it can be easily grouped with similar values (quartiles) to perform what is known as an interquartile analysis. The interquartile analysis allows you to identify which sales fall within the desirable range (as outlined by state statute) and which fall outside the desirable range. The goal is to do this quickly and accurately, focus on potentially problematic property sales, and identify data quality issues.<\/p>\n

In the video example below, sales are grouped into assessment neighborhoods (more on that below) and sized by their sales ratio.<\/p>\n

First, you choose the assessment neighborhood(s) you would like to investigate.<\/p>\n

Second, you choose the sales ratio quartile(s) that you are interested in. In our example the percentages are broken into three categories, the two inner quartiles are lumped into one (65-130).<\/p>\n

Next the histogram shows a frequency of all sales, and where the sales ratios fall. You can use the map to explore specific areas, and to understand if sales and neighborhoods are near each other.<\/p>\n"},{"acf_fc_layout":"youtube","start_time":"0","end_time":"","youtube_video_url":"