I recently had a Realtor tell me, “County assessments have no bearing on the appraisal value, sometimes they are right and most of the time they are way off.” Now, I would agree with some of this statement. The County assessments can be off in comparison to what homes are selling for and are listed for. (See a previous post that discusses sold vs listed price.) However, chances are there is an average percentage difference above or below the assessed value for a specific market area.
For example, in Kalaheo on the Makai side homes are selling for an average 110% over the assessed value. I came up with that number by comparing the recently sold homes to their 2015 county assessments. This is for homes sold from 7/1/2015 to 12/13/2015. Some homes are below but most are above for the Kalaheo area. And I would have to say that because there is a bigger demand for homes below $600,000, the percentage is more like 113-117%. Below you will see the numbers.
Numbers Don’t Lie
People overpay for things all the time. Homes are not an exception. Home buying and selling can be very emotional. Once you are attached to a certain home, it can be hard to give up. Since this is a big investment in most people’s lives, you should do your homework. Make sure you aren’t overpaying for a home as the buyer, or if you are the seller, asking for too much.
A good friend of mine, who is a very successful businessman that built and sold a few companies, has a mantra – “Numbers don’t lie.” And it’s true. What lies is your emotional attachment. That emotional attachment can cause some bad decisions if you aren’t careful. Your Realtor should be able to tell you the margins and averages for the market area you are in.
Some examples of important margins or averages, like the one above, could be:
- price per square foot of relevant sales
- sold vs. listing price
- average days on the market
- margins against zestimates
Each market area or neighborhood could and probably does have different margins and averages. The north shore of Kauai is very different then the south side. Lihue is different than Eleele. The mauka side of Kalaheo is the different than the makai side. From my example above, you can see that home margins can change based on affordability and demand. If your real estate agent hasn’t spoken to you about any of this, or doesn’t know, then you need to find a new agent ASAP.
Bottom line: do your homework, or find someone who can, to make sure you know what you are getting into as a seller and as a buyer.
What’s Going On In Your Neighborhood?
If you want to find out what’s going on in your area, then contact me.
JP Bolwahnn, R(S) – #77692