What is the trend factor formula?

The trend factor formula is utilized in mass appraisal to adjust property values based on changes in the market over time. This formula helps in capturing the movement of property values in relation to an established target level, which reflects the desired value based on current market conditions.

The correct formulation, where the target level is divided by the current level, effectively calculates the ratio that represents how much the property values have changed in relation to a reference point. This division allows appraisers to quantify the extent to which values need to be adjusted to align with the target level, indicating the percentage increase or decrease required.

By using this approach, appraisers can standardize values across a region or property type to reflect current market realities more accurately. The trend factor derived from this formula is crucial for maintaining equitable assessments and ensuring that property values are consistent with prevailing market conditions.