THE 2014 SCARSDALE REVALUATION - An Overview. May 29, 2014

Transcription

1 THE 2014 SCARSDALE REVALUATION - An Overview May 29, 2014

2 THE 2014 SCARSDALE REVALUATION TEAM Richard A. Borst, PhD Senior Research Scientist, Tyler Technologies Five decades of experience in computer-assisted mass appraisal (CAMA); 1973 led a team of programmers and analysts to assist the State of New York to upgrade their CAMA system; 1974 joined Cole-Layer-Trumble Company now Tyler Technologies/CLT Appraisal Services, Inc. (Referred to herein as Tyler Technologies); Published author of a number of technical articles in the field of mass appraisal; A frequent speaker at conferences related to property tax, GIS, GIS/CAMA integration; Received his PhD in Statistics Eugenia H. Flynn, ASA Appraisal Operations Manager, Tyler Technologies Four decades of experience in the Mass Appraisal field; 1975 joined Cole-Layer-Trumble Company now Tyler Technologies; Accredited Senior Appraiser of the American Society of Appraisers, Real Estate, ad valorem; Has supervised revaluations in all New England states, New Jersey, New York, Pennsylvania, Delaware, West Virginia, Ohio, and Missouri. 2

3 THE 2014 SCARSDALE REVALUATION TEAM John F. Ryan, CAE, Revaluation Consultant & Monitor, Scarsdale 35 years of experience in the property assessment industry, including public sector employment at the state (New York/Massachusetts) and municipal levels of government; Certified General Real Estate Appraiser, in New York, Massachusetts and Connecticut; Expert witness for complex single-property appraisals (fee appraisals) and for mass appraisal techniques; Nationally certified appraisal instructor for the International Association of Assessing Officers (IAAO); The Appraisal Foundation, (TAF) Washington, DC, Subject Matter Expert for developing and maintaining real estate appraisal exams for state licensing; TAF Appraisal Standards Board, Certified Instructor, Uniform Standards of Professional Appraisal Practice. John Wolham, Regional Director, Office of Real Property Tax Services Nanette J. Albanese, SRA, IAO; Assessor Patrick McEvily, MAI, SRA; Deputy Assessor 3

4 Introduction: In March of 2012, the Town/Village of Scarsdale entered into an agreement with Tyler Technologies to inspect and revalue all properties within the Town/Village. The scope of work included: Updating and computerizing physical inventory for each property obtained via field inspection; Analyzing local market sales to build valuation models in the New York State RPS CAMA computer software system, the tool used for property valuation; Worked with the Assessor & staff to review the computer-estimated values to ensure equity; Met with Scarsdale taxpayers to review property data and preliminary values prior to the Assessor s posting of the 2014 Tentative Assessment Roll. 4

5 Why Revaluation? Equity - The market is forever changing. Every property is not affected equally. Fair market value is affected by a number of factors including: - Property class (e.g. residential, commercial, industrial) - Property location (e.g. neighborhood, street) - Property desirability (e.g. condition, quality, amenities) - Market supply and demand (e.g. local, national and international) 5

6 Fee Appraisal vs. Mass Appraisal Fee Appraisal Mass Appraisal A fee appraiser estimates value one property at a time; The appraisal is done for a specific, or particular purpose, resulting in different estimates of values: e.g. purchase, refinance, divorce, estate, etc.; A fee appraiser values that one property at any point in time. Revaluation is performed using mass appraisal techniques-meaning many properties are appraised as of a specific point in time; A mass appraisal uses a common database, uniform methodology, and allows for statistical testing of the results. 6

7 Fee Appraisal vs. Mass Appraisal Fee Appraisal Mass Appraisal One property; Date of appraisal any date; Equitable appraisals among similar properties is not a concern; Adjustments to comparable sales are determined for each appraisal and can differ depending on the appraiser, or time of appraisal; Single value produced; No statistical tests are available to support the accuracy of the appraisal. Many properties; Date of appraisal is statutory = July 1, 2013 for the June 2, 2014 assessment roll; Equitable appraisals among similarly valued properties is critical; Adjustments are built into a model and are the same for all similarly-valued properties; Contributory values for each significant property feature are calculated; Statistical tests are available and used to support the accuracy of the computergenerated appraisals. 7

8 The Revaluation Process Collect and quality control data; Review sales and determine neighborhood delineations and assignments; Build and test valuation models; Value all properties using models; Review all property valuations in the field; Inform the public and disclose values; Conduct informal taxpayer reviews; Consider complaints, issues and make appropriate adjustments; Assessor files the Tentative Assessment Roll. 8

9 Sales Comparison Approach Recent Sales of improved residential properties are researched and verified as valid and arms length; The common data elements collected for residential property are studied and analyzed to determine the factors affecting market value and their relative contribution to property value; The common property elements are assigned value by the MRA estimation technique and are weighted for their relative contribution to value so that comparisons and adjustments can be made. 9

10 What factors determine comparability of properties? Similarity of market neighborhoods; Similarity of building size, style, quality of construction, etc.; Similarity of age and overall physical building condition; The currency and adequacy of the number of sales, which must be sufficiently exposed to the market to ensure validity. 10

11 Land Valuation Location, location, location! Land value directly relate to the desirability of a property s specific location; Reviewed and analyzed all vacant and teardown land sales in Scarsdale to develop land valuation models that were considered to reflect the local market, as of July 1, 2013; There were a total of 9 recent sales of vacant land parcels and 64 recent sales of property where a dwelling was razed shortly following the sale and a new dwelling erected (commonly called teardown sales); These land sales range from $450,000 (.16 acres) to $6,500,000 (4.85 acres); The entire pool of land sales considered and used range in size from 0.12 acres to 4.85 acres. 11

12 Mass Appraisal Standards for Quality of Assessments The International Association of Assessing Officers (IAAO) and the NYS Office of Real Property Tax Services have developed standards to measure the quality of revaluations. Median Assessment to Sale Price Ratio 90% - 110% Price Related Differential (PRD) COD Single Family (NYS Standard) Newer/Homogeneous 10% Older/Heterogeneous 15% (NYS Standard) ORPTS - NYS Standards: Weighted Mean Assessment to Sale Price Ratio 95% - 105% 12

13 Statistical Results of the 2014 Scarsdale Revaluation Residential Property Only IAAO/NYS Standard Results Residential Improved Properties Median Assessment to Sale Ratio 90% 110% 100% Price Related Differential (PRD) COD < Weighted Mean 95% - 105% 101% 13

14 The Scarsdale Appeal Process Scarsdale property owners met with Tyler representatives to discuss the new appraised values on approximately 927 parcels (15.6%); Over 1,100 property values were reviewed as a result of the informal reviews; Notices indicating the result of these reviews will be mailed to property owners on Friday, May 30, 2014; The statutory 2014 grievance period is June 2 June 17; grievances shall be filed with the Assessor during this period; Grievance Day is Tuesday, June 17, 2014, the last day for filing; The Board of Assessment Review will meet during the summer to review each petition; The Final Assessment Roll will be filed on September 15,

15 SUMMARY Scarsdale now has: Up-to-date, computerized property inventory (95% inspection rate); Use of NYS RPS CAMA software to facilitate future computerassisted valuation of all real property types based on current market models; Assessments that reflect 100% of market value, as of July 1, 2013, based on statistical analysis of recent sales; Values that are supported by statistical measures exceeding IAAO and NYS standards for assessment equity; Plan for maintaining on-going assessment equity: Complete full revaluation - June 2, 2014; Annual review of values of all properties to determine assessment equity; Next full reappraisal (limited data collection, new models and full field review) tentatively scheduled for 2017.) 15