How is the value of a private residence generally assessed?

The value of a private residence is typically assessed based on recent market sales prices. This method is known as the market approach or comparable sales method, where appraisers look at the prices of similar properties that have recently sold in the same area. This approach reflects the current market conditions and provides a realistic value based on what buyers are willing to pay for comparable homes.

Using recent sales prices captures various factors influencing property value, such as location, size, condition, and amenities, making it a reliable metric for appraisals. Additionally, this method aligns real estate valuations with economic principles, as it is fundamentally based on supply and demand dynamics in the housing market.

In contrast, other assessment methods like government appraisal rates, zoning laws, or homeowner estimates do not provide the same level of accuracy or reflect the prevailing market conditions as effectively as the market sales prices approach. Government appraisal rates might set a baseline but are often not as closely aligned with actual sales. Zoning laws influence how properties can be used but do not directly determine market value. Finally, homeowner estimates can be subjective and may not accurately represent the market's view on property worth.