Mass Appraisal Method
The reappraisal of property in Jefferson County is for all parcels as they exist on January 1. Using the same methodology as a fee appraiser for every parcel in the county is a daunting task and isn't possible! This is because of the number of properties that have to be valued (over 220,000 properties), the number of sales that are used (approximately 24,000 sales) and the resources available (staff, inspections, analyzing individual comparable sales).
Mass Appraisal Sales Period
In addition, the law states a specific time frame in which the sales must occur. The minimum requirement is 18 months, and depending on the number of sales available for the property type, a maximum of 5 years. Residential and vacant land parcels are valued with 24 months of sales, from July 2014 to June 2016. Because the market can change gradually or dramatically during that time frame; the law requires that values cannot be calculated until the sales have been analyzed and adjusted to one point in time, which is the end of June, therefore, before values are calculated, the sales are adjusted for market conditions, concessions, personal property, and time.
Mass Appraisal Value Technique and Process
After the sales are adjusted for time, a technique called multiple regression analysis (MRA) is used to determine market value. MRA is appropriate for mass appraisal purposes because it is essentially an automated application of the sales comparison approach that uses all similar property type sales in geographic areas, not just three. MRA determines the proper adjustment for property characteristics important to the market. This is done through an algorithm designed to fit the sale prices as closely as possible.
The sales are separated by property types (single-family, condominiums, townhomes and duplex/triplex) and regional location (economic areas). Then, different value models are used for each property type and respective economic area. The property characteristics included in the value models are design type, quality, living area size, age, bath type and count, garage type and size, basement type and size, heating type and the neighborhood location. Some characteristics have been collected but are not adjusted, including bedroom count, because other features, such as total living area and quality type, account for it.
Market Approach Methods for Mass Appraisal
Colorado State Statutes [39-1-103 (5) (a) and (8) (a)] require all county assessors to value residential real property solely by the market approach. There are several methods used to determine values by the market: paired sales, market-adjusted cost approach and multiple regressions.