Where Are Property Reappraisal Numbers Coming From In State?
This story is excerpted from the MT Lowdown, a weekly newsletter digest containing original reporting and analysis published every Friday.
We’ve had hundreds of responses so far to our call for reader questions about this year’s round of property reappraisals. Among the most common (slightly paraphrased): Where the $#*& are these numbers coming from?
The simple answer is they’re the state revenue department’s best effort to estimate the market value for each residential property in the state as of Jan. 1, 2022. In legal terms, appraised value is the price the department thinks a property would sell for between “a willing buyer and a willing seller.”
Of course, producing reasonably accurate value estimates for hundreds of thousands of properties from Yaak to Alzada isn’t exactly an easy job. As the department details in its 61-page valuation manual, it relies on a complex statistical model to estimate property values en masse.
While actual property sale prices are kept private in Montana, department staff have access to confidential Realty Transfer Certificates filed with county clerks when properties are sold. Revenue department staff combine that sales data with information about the size and character of individual properties — things like lot size, age of the structure and bathroom count (you can look up what’s in that part of their database at property.mt.gov).
One of the primary reasons property owners are notified of new assessment values is to give them a chance to appeal the estimate. If, for example, the department is under the impression your home has a bathroom you’re not aware of, you can file an appeal form asking DOR staff to give your appraisal another look.
Keep in mind though that however jaw-dropping your appraisal increase is, there’s a non-trivial chance that it really is, for better or worse, in line with your local real estate market.
Because of Montana’s sale price privacy laws, we don’t have a perfect sense for precisely how unaffordable the state has gotten in recent years as more and more people compete for limited housing stock. But third-party estimates generally track with the state’s reappraisal numbers. Sales data from Missoula-area real estate agents, for example, suggests that the median price for homes sold in the county rose by 49 percent between 2020 and 2022. And real estate website Zillow estimates the typical Montana home value rose from $277,000 to $403,000 between January 2020 and January 2022. That 45 percent increase matches the revenue department’s number almost precisely.