The Difference Between Assessed Value and Market Value in San Diego

If you’re navigating the San Diego real estate market, understanding the difference between assessed value and market value is crucial. Think of assessed value as the price a government tax assessor assigns to a property for taxation purposes, while market value is the price a buyer is willing to pay in a competitive market.

San Diego’s real estate landscape is dynamic, attracting homeowners and investors alike. As of 2025, the city’s population has grown to approximately 1.45 million, with a median household income of $92,000 and a median home price of $970,000. With home prices fluctuating, knowing the impact of these values can help you make informed decisions.

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What Is Assessed Value in San Diego?

The assessed value of a home is the valuation assigned by the San Diego County Assessor’s Office for property tax purposes. It is used to determine ad valorem tax and typically differs from the market value.

Factors influencing assessed value include:

• Property condition and size
• Local property values
• Home features and improvements
• Current market conditions

Unlike market value, which can rise significantly based on demand, assessed values are regulated by California’s Proposition 13, ensuring they increase by no more than 2% annually, regardless of market fluctuations.

How to Calculate Assessed Value in San Diego

To determine a property’s assessed value, multiply the assessed percentage (determined by the state) by the purchase price at the time of acquisition. For example:

• If your home was purchased for $800,000, and the assessed percentage is 1%, the assessed value would be $800,000 x 1% = $8,000 in property taxes annually.

Even if market prices rise sharply, your assessed value remains capped, protecting homeowners from drastic tax increases.

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How Is Property Tax Calculated in San Diego?

San Diego has a base property tax rate of 1%, with additional local fees and assessments bringing it to approximately 1.25%.

To estimate your monthly property tax:

• Multiply the home’s purchase price by 1.25%
• Divide by 12 months

Example: A home purchased at $900,000 would have an estimated annual tax of $11,250, or $937.50 per month.

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What Is Market Value in San Diego?

Market value represents the price a buyer and seller agree upon in an open-market transaction. Unlike assessed value, market value fluctuates based on demand, neighborhood trends, and economic conditions.

Factors That Influence Market Value:

• Home condition and renovations
• Curb appeal and location
• Property size and features
• Comparable home sales in the area
• Market demand and interest rates

How Is Market Value Determined?

Real estate professionals use methods such as:

• Sales Comparison Approach – Comparing recent sales of similar properties
• Income Approach – Used for rental/investment properties
• Cost Approach – Determining value based on the cost to rebuild

Since San Diego’s market is highly competitive, market value often exceeds assessed value, impacting your home equity and resale potential.

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How Do Assessed and Market Values Impact San Diego Homeowners?

For San Diego homeowners, understanding these values is key to making sound financial decisions:

• Lower assessed values mean lower property taxes
• Higher market value increases home equity and selling potential
• If planning to sell your home fast in San Diego, understanding market value ensures you get the best offer

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