# King County Department of Assessments

Fair, Equitable, and Understandable Property Valuations

Office Hours:
Mon - Fri
8:30 a.m. to 4:30 p.m.

TEL: 206-296-7300
FAX: 206-296-5107
TTY: 206-296-7888

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# Glossary of terms for residential parcels

 CENTRAL TENDENCY (1) The tendency of most kinds of data to cluster around some typical or central value, such as the mean, median, or mode. (2) By extension, any or all such statistics. CHARACTERISTICS-BASED MARKET ADJUSTMENT A market adjustment model which uses previous assessed value along with property characteristics. The basic model form is Sale Price = Prior Year Assessed Value * (1 / factor 0 + (factor1 * Char 1) + (factor2 * Char2)…+(factorN*CharN) ), where Char1 and so on are items such as building grade, lot size and so forth. The influence of these characteristics must be statistically significant over and above any statistical relationship the prior year assessed value bears on sales prices. COEFFICIENT OF DISPERSION (COD) The average deviation of a group of numbers from the median expressed as a percentage of the median. In ratio studies, the average percentage deviation from the median ratio. It is a measure of uniformity. COEFFICIENT OF VARIATION (COV) A standard statistical measure of the relative dispersion of the sample data about the mean of the data; the standard deviation expressed as a percentage of the mean. It is a measure of uniformity. COEFFICIENT (1) In a mathematical expression, a number or letter preceding and multiplying another quantity. For example, in the expression, 5X, 5 is the coefficient of X, and in the expression aY, a is the coefficient of Y. (2) A dimensionless statistic, useful as a measure of change or relationship; for example, correlation coefficient. COMPARABLES SALES; COMPARABLES (1) Recently sold properties that are similar in important respects to a property being appraised. The sale price and the physical, functional, and locational characteristics of each of the properties are compared to those of the property being appraised in order to arrive at an estimate of value. (2) By extension, the term "comparables" is sometimes used to refer to properties with rent or income patterns comparable to those of a property being appraised. CONFIDENCE INTERVAL For a given confidence level, the range within which one can conclude that a measure of the population (such as the median or mean appraisal ratio) lies. CONFIDENCE LEVEL The required degree of confidence in a statistical test or confidence interval; commonly 90, 95, or 99 percent. A 95 percent confidence interval would mean, for example, that one can be 95 percent confident that the population measure (such as the median or mean appraisal ratio) falls in the indicated range. It is a measure of assessment reliability. CORRELATION A statistical phenomenon (and a technique for estimating its strength) whereby knowledge of one fact about a thing implies some knowledge of a second fact about that thing. For example, because the volume and weight of water are correlated, knowing that a quantity of water is one gallon also means knowing that its weight is eight and one-third pounds. Linear correlation, the kind most often encountered, means that an increase in one factor in some proportion (say, a doubling) changes the other in the same proportion. With curvilinear correlation, as between the radius and the area of a circle, this is not true, despite the fact that the correlation may be very strong in the sense that knowledge of one fact tells you precisely the other fact. These are examples of variables perfectly correlated or nearly so; more often, correlation is only partial – for example, the correlation between the age and height of a child. The correlation coefficient gives the strength of the linear relationship between the two variables. COST APPROACH One of the three approaches to value, the cost approach is based on the principle of substitution – that a rational, informed purchaser would pay no more for a property than the cost of building an acceptable substitute with utility. The cost approach seeks to determine the replacement cost new of an improvement less depreciation plus land value.