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ORANGE COUNTY 1 <br /> NORTH CAROLINA <br /> TAX ADMINISTRATION <br /> Nancy T Freeman,Director nfreeman@orangecountync.gov 228 S.Churton Street,Suite zoo,Hillsborough,NC 27278 919-245-2100 <br /> Memorandum <br /> To: Orange County Board of Commissioners <br /> Cc: Bonnie Hammersley, County Manager <br /> From: Nancy T. Freeman, Tax Administrator <br /> Date: May 18, 2020 <br /> Re: 2021 Property Tax Revaluation Update <br /> North Carolina state law, G.S. 105-286(a), requires that counties conduct a countywide revaluation of real <br /> property at least once every eight years. Orange County last conducted a countywide revaluation effective for <br /> January 1, 2017 and current tax assessments reflect market value as of that appraisal date. Orange County's <br /> next revaluation date will be January 1, 2021, which reflects a four year cycle. <br /> A revaluation is mandated by the N.C. General Statutes, but is also necessary to realign the values of real <br /> property throughout the County to maintain equitable and uniform property values among property owners. <br /> Market values are shaped by property sales, and our office's responsibility is to look at those sales, interpret <br /> the market data, and estimate market values for all properties within Orange County. <br /> We have been compiling data for the 2021 revaluation over the last eighteen months. We've compiled sales, <br /> contacted property owners and consulted with professionals to ensure that we have a full understanding of <br /> what is happening in the Orange County real estate market. We will continue to monitor the local trends and <br /> make necessary adjustments through the end of 2020. <br /> Sales Analysis <br /> We measure mass appraisal effectiveness by calculating the median sales ratio. It is computed by dividing the <br /> assessed value by the sales price. A sales ratio of less than 1 indicates that the tax assessment is lower than <br /> the property's recent sales price and vice versa. The sales ratio shows what percentage of market value is <br /> represented by current tax assessment. A median sales ratio of 0.95 indicates that tax assessments represent <br /> 95% of current market sales. This ratio is a measure of central tendency. There are ratios higher and lower <br /> than the median, and the data spread is indicated by the Coefficient of Dispersion (COD). A lower COD is <br /> better, and one less than 15 is a post-revaluation goal. The lower the COD, the more tightly-compacted the <br /> sales are around the median sales ratio. The chart below displays sales analysis data for 2018 and 2019. The <br /> median sales ratio has fallen over the last three years, and this indicates that sales prices have been on the rise <br /> since the 2017 revaluation. <br /> Orange County Government I www.orangecountync.gov 1 919.732.8181 <br />