Property wealth in a hot real estate market – Rochester Beacon

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After years of lackluster growth in home prices, the Rochester metropolitan area since 2020 has been catching up, repeatedly ranking near the top of Realtor.com’s list of the nation’s “hottest real estate markets.”

In New York, Monroe County has been a price-growth leader, data compiled by the New York State Association of Realtors shows. Among counties with at least 2,000 home sales in 2023, Monroe County’s 53 percent increase in median home price was second only to Orange County.


Buy/sell, rent/lease residential &
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On average, Monroe County sellers last year received a 15 percent premium over their asking price.
Metro Rochester’s hot housing market also is reflected in median days on market. In May, homes here sold faster than in all but two other large metros nationwide, in large part driven by historically low inventory of homes for sale.

The city of Rochester’s controversial recent property reassessments have captured the effect of this trend. Increases in property wealth for Rochester homeowners are now reflected in the assessments.

City Assessor Michael Zazzara says the price surge predates the COVID-19 pandemic.
“The uptick in values started in 2018 and 2019,” says Zazzara, who sees the trend continuing. “In talking to people, (buyers) are paying significantly more than the assessed values we just put out.”

Citywide, the assessor’s records indicate an increase in property wealth of about $3 billion compared with before the reassessment.

On average citywide, assessments increased 65 percent for homestead properties (a category that includes all residential properties under four units), versus a 36 percent rise in non-homestead property assessments.

Prices in neighborhoods like Browncroft, the South Wedge and North Winton Village showed significant appreciation in the 2016 and 2020 reassessments, Zazzara says. Higher prices in these markets appear to have pushed up prices in Beechwood, Marketview Heights, 14621 and the 19th Ward.

According to Zazzara, ZIP codes with average assessed values nearly doubling from 2019 to 2023 include 14605 (Upper Falls and Marketview Heights), 14621 (Group 14621), 14611 (19th Ward/Genesee-Jefferson), 14609 (Beechwood/Homestead Heights), and 14608 (Plymouth-Exchange/Corn Hill/Edgerton).

A tough market for buyers

Soaring market prices have made buying a home much more difficult, particularly for first-time home buyers. Moreover, while owners are pleased that their homes are worth more, they are not eager to see their tax bills rise.

Higher assessments sparked a record number of questions submitted to the Assessor’s Office and the Board of Assessment Review. Zazzara’s office conducted 5,419 informal reviews, reducing assessments in 64 percent of the cases. The Board of Assessment Review received 1,330 applications from homeowners. Of these, 53 percent received a reduction.

But will my taxes go up?
An assessment increase does not necessarily translate into a tax increase. A homeowner’s tax bill is based on their property’s share of total assessed value. (See the Beacon’s property tax explainer for a refresher). In other words, the share you own is the share you owe.

Suppose you build a magnificent addition to your house, doubling the square footage, while your neighbor’s house remains unchanged. Your house should be worth more, relative to your neighbor’s, than before you did the work. And your assessed value will likely rise—as it should—and your tax bill will go up, too.

But if your increase in assessed value was equal to the overall average increase, then your share of total assessed value also stayed the same and so should your tax bill, provided that the tax levy also stayed the same. With the increase in assessed value, a lower tax rate can bring in the same total revenue.

In Rochester this year, Mayor Malik Evans and City Council worked to keep the levy constant.

■ The city tax rate for 2023-24 was $17.841 per $1,000 of assessed value ($6.158 for the city and $11.323 for the school district).
■ The city tax rate for 2024-25 was $11.11 per $1,000 of assessed value ($4.059 for the city and $7.051 for the school district).

To raise the same levy with much higher assessed values, the tax rate was cut $6.73 per $1,000 of assessed value to $11.11 per $1,000 assessed value, about 38 percent.

The city’s “tax estimate” tool allows users to compare properties. In three sample cases, the increase in the assessment was more than the average and the tax bill rose. In three other cases, the assessment increase was less than the average and the tax bill fell.

Will a county tax bill rise with a higher city assessment?
A homeowner’s county tax bill depends on their share of the county property value, just as their city bill depends on their share of the city’s property value. But if your assessment just went way up, your share of the county’s property value will have gone up, too, and you’ll pay more tax, right?

Not necessarily. Let’s start with a puzzle: The Hilton Central School District spans parts of the towns of Greece, Hamlin and Clarkson. Yet the school tax rate in each of these towns is different. For the 2023-24 school year, residents of Hamlin paid school taxes of $24.22 per $1,000 of assessed value (2.422 percent). Residents of Clarkson, however, paid $16.23 per $1,000 of assessed value (1.623 percent).

That’s a big difference. Do Clarkson residents get a deal on their school taxes? And should Hamlin residents hold a demonstration demanding equal treatment?

Here’s the problem: New York assigned the job of setting assessed values to localities, principally towns and cities. But many school districts and nearly all counties span multiple assessing districts—and the assessing districts are not required to assess at the same proportion of full value (estimated market value).

Clarkson property assessments are set at full value while Hamlin’s assessments are set at 67 percent of full value. Thus a $100,000 house in Hamlin is assessed at $67,000 while a $100,000 house in Clarkson is assessed at $100,000. Adjusted for differing assessment practice, school tax rates in Hamlin and Clarkson are the same. Here’s the math:

■ The Hamlin owner pays 2.422 percent of $67,000 to Hilton Central or $1,623.
■ The Clarkson owner pays 1.623 percent of $100,000 to Hilton Central or $1,623.

Tax rates across districts with different assessment ratios are “equalized” by the state Department of Taxation and Finance. The department compares actual sale prices of property in each assessing district to the assessed values of those same properties and calculates an equalization rate.

“Full values” are calculated by multiplying the assessed value by the equalization rate and dividing by 100. The full value is the assessor’s best estimate of the property’s market value at this point in time. Hamlin’s equalization rate is 67 while Clarkson’s is 100, thus the assessed values in Hamlin are about 67 percent of full value while Clarkson’s assessed values are about equal to full value. (Read more about the process here. Current equalization rates, property tax exemptions, tax rates, tax levies and more information about the property tax is here.)

The county tax levy—$447 million in 2023—is shared among county property owners according to each owner’s share of total county taxable assessed full value. As the taxable assessed full value in the city of Rochester in 2023 was 8.3 percent of the county total, Rochester taxpayers paid 8.3 percent of the total levy. The taxable assessed full value in the town of East Rochester was 0.7 percent of the county total and its taxpayers were billed accordingly. But every county taxpayer paid the same tax rate per $1,000 of taxable full value.

The equalization process ensures that the assessed values of homes both in Rochester and the county’s towns have all been adjusted to “full value.” A change in your assessment might increase your county tax if the full value of your home rose faster than that of someone living in Henrietta, Gates or Penfield. Or your share of the county tax levy could fall if full value elsewhere rose faster.

Your share of the county levy is equal to your share of county assessed value—after the state has used equalization to convert all properties to “full value.”

City Assessor Zazzara reminds homeowners whose property value jumped in the reassessment of the benefit of higher home equity.

“They can take out a home equity loan,” he says. “If they choose not to, their profit will be larger when they do go to sell the home.”

Kent Gardner is Rochester Beacon opinion editor. Contributing writer and data journalist Jacob Schermerhorn created data visualizations for the article. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. Submissions to the Letters page should be sent to [email protected]

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