What does a PRD below 1.00 suggest?

A price-related differential (PRD) below 1.00 indicates that lower priced properties are being assessed at a lower percentage of their market value compared to higher priced properties. This situation often arises in property tax systems where the assessment process may not uniformly apply to all property values, leading to disparities in how properties of different values are taxed.

In this context, a PRD less than 1.00 typically reflects a trend where the assessment ratios for lower valued properties are less than the ratio for higher valued ones. This suggests an inequity in the system where lower-priced properties may bear a disproportionately lighter tax burden relative to their market value compared to their more expensive counterparts.

For appraisal and assessment purposes, this metric is crucial as it helps assessors and policy-makers identify potential inequities in property assessment practices, ensuring fair and equitable taxation.

Other options, while they present different scenarios, do not accurately capture the implications of a PRD below 1.00 in relation to property assessments and their valuations.