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26 <br /> Slide #6 <br /> Countywide Vertical Equity Analysis <br /> • Vertical Equity <br /> - Vertical equity means that properties should be assessed at the same proportion of their fair market value, <br /> regardless of the property's value,to ensure that lower-priced properties and higher-priced properties exhibit the <br /> same ratio of assessed value to actual sale prices <br /> Sales ratio=Assessed Value/Actual Sales Price <br /> 1.0—Assessed value matches sales price <br /> Above 1.0—Assessed value is greater than sales price <br /> Below 1.0—Assessed value is below sales price <br /> • Countywide study <br /> Analyzed sales bank of approximately 5,800 qualified residential sales <br /> - Removed approximately 950 sales as outliers(difference between assessed value and sales price>25%) <br /> • Data stratified by sales price, decade built, building type, township, census tract <br /> ORANGE COUNTY <br /> 6 NORTH CAROLINA <br /> Slide #7 <br /> Countywide Vertical Equity Analysis <br /> • Measures Analyzed <br /> Mean—average of sales ratios <br /> Median—middle value of sales ratios <br /> - Price Related Differential(PRD)—measures uniformity sales ratios between low and high values properties <br /> A PRD close to 1.0 indicates neutral assessment practices <br /> A PRD above 1.0 indicates higher-value properties are under-assessed(regressive assessment). <br /> A PRD below 1.0 means higher-value properties are over-assessed(progressive assessment) <br /> International Association of Assessing Officers(IAAO)specifies an acceptable PRD range between 0.98 and 1.03 <br /> ORANGE COUNTY <br /> 7 NORTH CAROLINA <br />