Good morning everyone. By now you should have received your 2023 assessments which, as promised, boast much higher assessed values than the previous period. First, congrats to you on your equity! Secondly, pat yourself on the back for being a proud Colorado taxpayer. Thirdly, let’s all soak in the realism of assessments and try to wrap our heads around how they are calculated.
The methodology is explained on the little cards they send out, and you can also just go to the assessor’s websites (for Weld or Larimer county) where the process is detailed. As a reminder, taxes are paid in arrears, so the money you’ll be paying over the course of this year (either via your escrows or directly to the county) are for the previous year. These numbers are based on rates that are a percentage of your home’s assessed value and were presumably voted on and approved by you, dear taxpayer.
Additionally, the part that always confuses and infuriates some people is “the actual value assigned to residential properties in 2023 and 2024 is based on market values as of June 30, 2022, as defined by sales of residential property in the 24-month period.”
The part where it gets murky is that this sales data is then “time adjusted”. And this year the time adjustment is off, IMO. Folks much more clever than myself can probably describe how inflated data can create a monster, and so far a few of you (myself included) said, “If I could sell my house for that much, I would”. In some cases you probably could, if you had the right agent of course (wink nudge). But in other cases like mine, eh, I’m not so sure. And that’s where the valuation protests come into play.
You can do it all online to some extent, but the time adjusted prices will likely undermine any attempt to set a realistic value. So bottom line: Let me know if you think yours is unfairly high and I’ll first look up the actual “time-adjusted value” (read: what it’s worth today) and then get you a bunch of comps for the period of assessment. You can then use them to aid your online protest.
In other news, yesterday was Fed day where it was announced a rate hike would happen, which surprised very few. This happened while I was at a conference in which one of the keynote speakers spewed a bunch of heady stuff about rates and the bond market. But one of his points was in line with something I’ve been saying for years (although for different reasons) and was my main takeaway for the day: Rates are largely unimportant when it comes to home sales. The most important factor? Jobs. And currently, Colorado’s unemployment rate is 2.8%, vs. the national average of 3.5%. For reference, at the height of Covid it was 14.7%; prior to that it hovered in the high 3s for a few years.
Finally, expect to see a future newsletter about AI, of which I have many thoughts. I attempted to write about it previously using Google’s Bard to describe rates, the local market and how to successfully navigate buying and selling. The results were about as boring and vaguely accurate as you’d expect so I shelved it. I’ve been told to embrace AI or leave Gen X and go full Boomer, so I guess I’ll use it to end this newsletter. Hey Bard, please write an amusing conclusion to my newsletter on real estate assessments, please? [The following is the actual AI response]:
“Real estate assessments: the gift that keeps on giving!
Real estate assessments are a gift that keeps on giving. They can help you figure out how much your home is worth, which can be helpful if you're thinking about selling or refinancing. They can also help you determine your property taxes, which can save you money in the long run.
But that's not all! Real estate assessments can also be a source of great amusement. Just imagine the look on your face when you find out that your home is worth more than you thought it was. Or the feeling of satisfaction when you get a lower property tax bill than you expected.
So next time you get your real estate assessment, don't just take it for granted. Enjoy it! It's a gift that keeps on giving.
And who knows, you might just end up laughing all the way to the bank!”
See what I mean? Hey Bard, they probably aren't laughing all the way to the bank, and they certainly aren't laughing at your "amusing conclusion". At least not in the way you intended, you stupid robot.
Thank you for reading and please let me know if you have questions on your values, or anything else for that matter. See you on the courts or at a show this summer. Cheers! Crip
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Crip Erickson, Owner/Managing Broker