Time for my annual BC Assessment rant. It is January 5th and already many radio broadcasts, lots of television time and much newspaper ink will have been wasted on the pseudo market analysis provided annually to us by BC Assessment.
BC Assessment produces an annual valuation of real property in BC, and does so for one reason alone, to provide municipalities a basis upon which to establish their property tax rates. The valuation is supposed to represent market value of the property on July 1st of the previous year. So the 2015 list is supposed to represent a market snapshot of July 1st, 2014.
The problem, more so in recent years, is not so much that the numbers aren't typically accurate in terms of market value, as they never have been, it is that BC Assessment sends out their people at the beginning of every year and insist that these are accurate numbers that reflect the market. The media then takes the ball and runs with it, comparing this year to last year and making conclusions about market performance over the last year.
And it is absolute nonsense.
Firstly, everyone conveniently forgets that the numbers are based on a July 1st date. So upon release the numbers are 6 months out of date.
Secondly, when BC Assessment representatives and media hosts talk about comparing 2013 to 2014 assessments they are talking about a change in assessed values from July 1st, 2013 to July 1st, 2014. Is that too complicated for say a typical radio host to understand, or are they just willfully ignoring it because they wouldn't want facts to get in the way of a story.
Thirdly, the numbers aren't accurate. Most real estate professionals agree on this point, and if yours is using assessed values to establish a market price for your home you may want to rethink your hiring decision. Need proof?
I do this every year, I pick a time period in July and an area, pull the house sales over that time and then compare them to the assessed value published in January to see how close they came. This year I picked Saanich East, single family homes and sale dates July 21-24. Given that the assessed values represent market value on July 1st you would expect them to be close. Here's the list, addresses omitted.
|Sold Price||Assessed Price||Percentage Difference|
By my count they were accurate 4 out of 14 properties. Their range was between almost 20% too high and 20% too low! No these numbers were not cherry picked, they are what came up and are faithfully reported. I have done this many times using larger and smaller sample sizes, different areas, different property types and the result is generally the same. A few accurate and the majority all over the place.
BC Assessment provides out of date market numbers that are inaccurate. Which would be fine, they have one client and it's the municipal governments of BC. But every year they come out and claim the numbers are accurate and even worse then comment on the state of the market quoting their own inaccurate numbers. And no one in the media calls them on it, and no one cares and people keep asking me what the assessed value of the property I'm selling is as though it has some defined relationship to market value.
And so every year I object. Happy New Year.