Wonder Why Real Estate Assessments Do Not Go Down?

McHenry County Blog ran an article in early December pointing out that real estate assessments are based on a three-year average price.

Because asking prices of homes have decreased and new home sales are down, a lot of people under a subsequent Northwest Herald article on the same subject showed they did not understand this technical definition of property value.
Saturday’s main article in the Business section contained a couple of sentences that should make it even clearer why assessments of homes have not dropped.

“The statewide average home sale price in November was $253,131, up 1.3% from $249,799 a year ago. The average home sale price in the Chicago area was $323,458, up 4.4 percent from $309,832 in November 2006.

So, home prices were up 4.4% for the last twelve months.

Since real estate assessments are based on fair market value, they should still be increasing, even if they were based on the most recent year’s sale prices.

But, most of the increase seems to have been in Cook County. Elgin’s Daily Courier News reports that the median home sale price in McHenry County was up 0.2 percent.

Don’t expect assessments to go down next year. There would have to be two years’ of property value declines in a row for that to happen.

We haven’t had one year of decreased property values yet.

DuPage County, on the other hand, saw prices go down 4.3% this past year. Kane went up 2.6%.

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The photo is of the Skinner home, still presumably appreciating on Christmas eve.


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