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You Asked: Why did 17 upscale Boise condos drop in assessed value last year?

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Real estate assessments continue to rocket up to record levels around the Treasure Valley, but last year a  group of nearly 20 of Boise’s most exclusive condominiums saw drops in assessed value — and their property tax bill along with it. 

The Crescent Rim Condominiums on the Bench overlooking Ann Morrison Park are some of Boise’s most upscale pieces of real estate. The highly amenitized complex features sweeping views of the foothills and is home to some of the city’s well-known names, such as former Albertsons GEO Gary Michael and Albertsons heirs Joe and Jamie Jo Scott. And in a city where condominiums aren’t common, the combination of the rim location and growing desire for Treasure Valley real estate it’s no surprise average sales in the complex last year averaged just shy of $1 million. 

[Who will oversee Ada property tax assessments? Four GOP hopefuls vie for Assessor spot, with no Democrats in the race]

So, why did 17 of these condominiums drop in valuation between 2020 and 2021?

The Ada County Assessor’s Office says the drop in value is due to the combination of the specific way the appraiser valued the complex and a single relatively lower sales price in the development pushing values in one of the project’s three phases down. Appraisal Division Manager Erin Brady said this situation demonstrates how the process to determine the value of a property isn’t an exact science. 

“Seven different appraisers could develop 7 different value-estimates for a single property, using the same sales information as of the same date (although you would hope their conclusions would at least be close to each other),” she wrote to BoiseDev in an email. “There isn’t one mathematically correct answer to “what is value.” Our goal is to just stay within what can be shown to be a range of value.”

Few sales in a small area = fluctuations 

The Crescent Rim Condominiums have three distinct phases, but only one saw a drop in value.

The seventeen properties examined by BoiseDev all were included in one phase and they saw roughly a 6% decrease on average across the board. The decreases all varied depending on their prices, size of the units and their original assessments, but they all dropped tens of thousands of dollars from their values. For example, one property dropped in value from roughly $884,000 to $826,000. Another from roughly $600,000 to $557,000. 

Meanwhile, the other two phases of the same exact development saw a 15% hike in value. 

Brady said this is because when the appraiser reviewed nearby comparable sales to give the property its assessed value, he or she split the Crescent Rim Condominiums into phases and reviewed it in three pieces. This means the appraiser only looked at a smaller pool of potential properties for sales to compare each other to. And, last year, this particular phase only had two sales in the same week to help determine the trend for if values are going up or down during 2021. 

One of the sales was for a condo valued at $864,200 selling for $739,000 on August 2020. Brady said this is because the condo sold for so far below its assessed value it heavily weighed in the appraiser’s decision to drop values for this particular phase of the project. The other sale, also in August 2020, was a condo valued at $702,000 selling for $685,000, slightly below its assessed value. 

Mass appraisal of projects relies on the concept of a “best fit trend,” meaning the trend for appraisals of neighboring and like properties going up or down should follow the line of data points from sales to capture an approximate average. Appraisers can’t only adjust the values of properties that sold and match them to their sale price. This results in some properties with values high relative to their sale prices and others valued low relative to their sale price. 

Property assessments for 2022 aren’t out yet, but Brady said this development will be handled differently this year. 

“We’re still working on 2022 values, so the % change year over year is still up in the air,” she wrote in an email. “The appraiser indicated he intends to group all 3 phases together for trending this year, so value increases should be more uniform across all three phases.”

‘Different buyers’

Appraisers do much more than simply comparing sales of nearby properties to determine value. 

In the case of the Crescent Rim Townhomes, this property is highly unique compared to most of the surrounding area. Not only are there few condominiums in this part of Boise, or Boise in general, but the majority of the surrounding neighborhood consists of smaller, detached single-family homes with much more modest prices.

This means that although the Crescent Rim Condominiums are surrounded by a sea of homes the appraiser could have compared values with, it would have been comparing apples and oranges. 

“Somebody in the market for a low-maintenance condo probably would have different motivation to buy than somebody in the market for an older detached home with yard space,” Brady said. “Because these property types tend to attract different buyers, we would probably go to some length to avoid trending them together.”

Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel - BoiseDev Sr. Reporter
Margaret Carmel is a BoiseDev reporter focused on the City of Boise, housing, homelessness and growth. Contact her at [email protected] or by phone at (757)705-8066.

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