The Star Tribune ran a story recently called The property tax gap that seemed to highlight something I’ve seen lately in housing transactions. Because there is a lot of data available on various county web sites, often times buyers and sellers go there to do some research to justify a particular price for a home. And while this is certainly a good source, it by no means is the definitive source or authority in what the price of a home should be.
For example, I conducted some analysis on homes sold in the Foxberry Farms development in Medina, MN. To my surprise, I found that some homes had tax assessed values within 2% of market value (recent sold price) and some homes were assessed nearly 30% below market value. So if you were to use tax assessed value to come up with market value, you would have a huge 30% price swing.