What Is the Difference Between Assessed Value and Market Value?

They Serve Two Different Purposes

One of the most common questions I hear from both buyers and sellers is, "Why is my home's assessed value so different from its market value?"

The answer is simple: they're calculated for different reasons.

An assessed value is used by the county to determine property taxes. Market value is what a buyer is actually willing to pay for your home in today's real estate market. The two numbers may be close, but they often differ, sometimes by a significant amount.

What Is Assessed Value?

In Kitsap County, the Assessor's Office estimates your property's value for tax purposes. That assessment considers factors like the size of your home, lot size, location, age, and comparable properties.

Because assessments are completed on a schedule and use mass appraisal methods, they don't always reflect current market conditions. If home values have risen quickly or the market has shifted, your assessed value may lag behind what buyers are willing to pay.

Likewise, major remodels or additions may not immediately be reflected in your assessment.

What Is Market Value?

Market value is the price a knowledgeable buyer is willing to pay and a seller is willing to accept in the current market.

This value is influenced by supply and demand, interest rates, location, condition, updates, layout, and buyer competition. Two homes with similar assessed values can sell for very different prices if one has been remodeled, offers better views, or has features buyers are actively seeking.

Market value changes throughout the year as market conditions change.

Which Number Matters When Selling?

If you're selling your home, market value is what matters most.

Pricing a home based solely on its assessed value can lead to overpricing or underpricing. Instead, I prepare a detailed market analysis using recent comparable sales, current competition, and local market trends to determine a pricing strategy that reflects today's market.

Understanding Your Home's True Value

Your assessed value is important for calculating property taxes, but it shouldn't be used to estimate what your home will sell for.

As a Kitsap County real estate agent, I help homeowners understand the difference and provide an accurate opinion of market value based on current data. Whether you're thinking about selling now or simply planning ahead, knowing your home's true market value helps you make informed decisions.