At this time of holiday festivities culminating in transitioning to the new year of 2025, we reflect on the real estate market indicators reporting a 23% increase of homes for sale in comparison to the same period last year. Even with improving supply contrasted with slower sales pace of activity, home prices have continued to escalate nationwide. The National Association of Realtors reported the nationwide median existing home price of $404,400 to have escalated a substantial 3% from one year ago, which could be good news or bad, depending on whether you are the buyer or seller.

As a professional realtor, I realize this is a pivotal time to discuss the differences between terminology we are familiar with deciphering terms of property value, assessed value, market value and taxable value. It is common that we use these terms in discussing housing worth flippantly while not really differentiating their meaning.

The term property value refers to different ways of referencing the overall value of a home. It is more of a generic umbrella designation with varied approaches for determination of value. A home’s market value depicts the estimated amount buyers are willing to pay for a home based on current market stats and sold comparables. Finally, a home’s assessed value, which is usually determined by a professional appraiser, is the barometer used for the sake of calculating how much you owe in property taxes and also based on your state, county and city laws which vary for each locale.

Market value is determined in a variety of ways, starting with a review of similar homes of value that sold within the past six months for relevant comparisons. Consulting with a professional realtor to determine the market value is always helpful and can provide you with a Comparative Market Analysis (CMA) of your home without costs involved.

Should you decide to sell, the market value results will be the catalyst of your asking purchase price when you do list your home and also allow for consideration of the right offer that is elicited when marketing your home for sale.

Market values also become part of the calculation of your home’s assessed value. The assessed value is used for the sake of calculating how much you owe in property taxes and is defined by the legal framework of your locale’s jurisdiction. A homeowner can opt to get a professional appraisal report at any time at their own expense, although not required.

However, when a purchase transaction has started and the purchase is based on a mortgage and not all cash for financing, a professional appraiser is assigned. Lenders are cautious and use the report as the guideline to determine that the value of the lending amount is commensurate to the purchase price should the homeowner default on their payments over time.

When a town does a town-wide current reappraisal mandate of all properties, such as was recently done by Teaneck, an appraisal company is assigned to calculate value for current information and calculations.

Assessed value uses the market value to compute your property taxes. Depending on the county nationwide, assessed value could be only a portion of the market value and is lower than the appraised market value. Since the assessed value is the multiplier of the town’s set rate, the lower appraised value is a plus for the homeowner. Each town has a different equalization ratio.

The Bergen County Master Report provides all the details of your particular address, which includes information of zoning designation, approximate building square footage, approximate land square footage and acreage, the year home was built, lot and block number, mortgage information and finally, the taxable value amount of your property.

Focusing on the reported taxable value amount is key to property tax results. The land value is reported first since pure real estate is the land itself; then the improvement value, which is actually your home on site, is secondary to the land value which is primary; and then the sum is added together with the final taxable value within your county. For the final computation, that sum is computed with the town’s rate as the multiplier along with the equalization ratio for that year and voila, the final computation of property tax amount that is owed for the year by the “happy” homeowner.

Just a reminder, each town needs to balance their budget yearly, usually in the summertime, and formulates a fixed rate that allows for the sustainable balance of the town’s budget costs and expenses. The tax rate is fluid per year based on the town’s financial needs at the time. That tax rate is the multiplier of the final computation of property tax amount owed along with the equalization ratio for the year.

Aside from getting too technical, and without hiring a professional appraiser from the get-go, your professional realtor will provide information of market value. This will help you make choices to take the plunge now or wait for future plans to transfer ownership and realize your equity when and if you are ready.

Hope this information is helpful to you, and remember, Home Is Where Your Heart Is!

Knowledge is powerful and will help you navigate life’s decisions along the way.

Wishing you all a Happy Chanukah and enjoy those yummy, sizzling latkes you won’t regret!

Ruby Kaplan is a realtor licensed in both New Jersey and New York. Visit rubykaplan.kw.com for more information. The Ruby and Bobby Kaplan/Keller William Town Life team will promote your home with the best of social media and create alerts for your criteria of housing needs. Your Housing Needs Are Our Priority! Ruby can be reached at 201-314-4152 or on her cell at 917-576-4177 or at [email protected].