Reviewing recent past sales with a licensed REALTOR® is important for Buyers and Sellers when making a decision to buy or sell a particular property however average neighborhood property value assessments can also be a useful source when strategically deciding what areas are best for investing money to buy either a family home or investment property. For the City of Edmonton, the ‘Average Assessment Change for Tax Class Residential’ is issued on an annual basis. As an example, open the pdf link below to review the City of Edmonton Report for 2009:
< Open Link to view 'City of Edmonton Average Assessment Change for 2008-2009' >
From this report, I have selected approximately 235 Edmonton neighborhoods to use in my analysis. Below are the top 25 established neighborhoods (in order) with the highest average 2009 property value assessments by the City of Edmonton:
Windermere Estates; Westbrook Estates; Windsor Park; Quesnell Heights; Oleskiw; Grandview Heights; Henderson Estates; Donsdale; MacTaggart; Ogilvie Ridge; Westridge; Bulyea Heights; Crestwood; Rhatigan Ridge; Richford; Cameron Heights; Brookside; Glenora; Parkview; Laurier Heights; Carter Crest; Lansdowne; Potter Greens; Twin Brooks; and Griesbach.
Conversely, below are the bottom 25 established neighborhoods (in order, excluding three lower value trailer park neighborhood divisions of Westview, Evergreen, and Maple Ridge) with the lowest average property value assessments by the City of Edmonton for 2009:
Clareview Business Park; Pembina; Millwoods Town Centre; Empire Park; Terra Losa; Montrose; Eastwood; Downtown; Parkdale; Queen Mary Park; Alberta Avenue; Boyle Street; Central McDougall; Canora; Baranow; Beacon Heights; Callingwood South; Canon Ridge; Cromdale; Sherwood; McCauley; Rideau Park; Calder; Glenwood; and Britannia Youngstown.
When analyzing Edmonton by dividing the City into six major sections, below are the large zones (in order) ranked in order of having the highest to lowest approximate average property value assessments by the City of Edmonton for 2009:
Southwest Edmonton; West Edmonton; Southeast Edmonton including Millwoods; Northwest Edmonton; Northeast Edmonton; and Central Edmonton.
[Notes: there are several assumptions I have made when assessing the validity of property value assessments data including but not limited to the following:
(a). The property value assessments provided by the City of Edmonton are assumed to be accurate enough for the purposes of this analysis. This is a big assumption because the City assessment personnel have not been inside properties (i.e. value impacts for interior renovations or lack thereof are completely omitted from assessments) and assessment information can often be outdated by as much as six months or a year. The potential error between the City assessment and what the property would sell in today’s market in many cases can be out by tens of thousands of dollars or higher in high value neighborhoods. For the purposes of this analysis, because I am comparing entire neighborhoods relative to one another rather than on a property by property basis, I have deemed these City of Edmonton assessment errors to be negligible. Note however that when property owners want to ascertain the potential value of worth of a particular property in today’s market, they are advised to seek the advice and consultation of a licensed REALTOR®. Past sales change on a weekly basis and there are many factors REALTORS® will take in to account to assess a property that City assessment personnel do not.
(b). Although I believe assessment data is not reliable on an individual property basis, for this analysis I have deemed that the City of Edmonton assessment information is reliable when comparing property value assessments vs. the past year’s sales data for the following reason: if only five percent or less of properties within a given neighborhood are sold and bought, this could skew the data since in any given year perhaps only the best or only the worst houses in a given neighborhood will have been put up for sale. Conversely, the City assessment data takes into account all 100% of properties within each neighborhood (regardless if they have been sold or if they are retained by the current owner) and this is why the assessment data was used as a reliable source for this analysis.
(c). Industrial and major commercial areas without residences were omitted for this analysis.
(d). The variance from the previous year is presumed not important compared to the most recent year. If someone is buying a property today, I believe the most current year’s statistics for a neighborhood, relative to the current statistics for other neighborhoods being compared with, are most relevant because it indicates the value now and not what the value used to be. Neighborhoods will definitely improve or worsen as time progresses due to a number of factors including but not limited to: migration and turnover trends; redevelopment; rezoning; etc. and only by analyzing trends over a longer timeframe (e.g. five years, ten years, or longer) can any sort of conclusions or extrapolation be drawn as to what may happen in the future.]
Although higher property taxes are an unfortunate consequence of higher property value assessments, it is advised that property owners speak with their REALTOR®; lawyer; and / or municipality before attempting to appeal an assessment in attempts to get it lowered because: (a). The odds of success to lower an assessment usually costs more time, effort, and expense than it is worth; (b). The assessment may not go down that much to make any difference; (c). The City makes a new assessment each year so winning one year may or may not have any effect on the next year; (d). Taxes are based on a mill rate because the City must collect enough taxes to pay for all of its bills so even if the assessment goes down it is still possible for taxes to go higher; (e). A lower assessment may affect potential future resale value; and (f). Edmonton still maintains low property taxes compared to many other municipalities.
In summary, when making a decision between properties or between neighborhoods to buy a family home or investment property, it is wise to ask your REALTOR® for opinions and statistics on how high or how low average property value assessments and recent past sales are relative to other neighborhoods. * Remember: for future resale potential (as a general rule): it is usually better to buy a worse house in a better neighborhood than it is to buy a better house in a worse neighborhood.
[Article written and ©2009 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at Maxwell Devonshire Realty in Edmonton, AB]
Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you are serious about selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to SOLD@KellyGrant.ca to schedule a confidential appointment.