Assessed valuation is the value assigned to real property for the purposes of calculating the applicable property taxes. Assessed valuation is calculated based on a ratio of the appraised valuation as determined by state law. As an economic indicator, assessed valuation shows the trend associated with property valuations.
Property valuations typically follow the laws of supply and demand. Increased valuations may mean that property is in high demand and that the supply is not able to keep up with the demand, causing prices to increase. Lower valuations may demonstrate the opposite trend. Additionally, a growing economy will add new development to the tax base. The new growth will also increase the assessed valuation for the community.