What does PRD measure in a group of properties?

The Price-Related Differential (PRD) is a metric used to assess the level of bias in property assessments within a group of properties. Specifically, it evaluates how property values are related to their assessed values, assisting in identifying whether higher-priced properties are being assessed at a lower percentage of market value compared to lower-priced properties. A PRD greater than 1.0 could indicate that higher-value properties are undervalued relative to lower-value properties, suggesting a potential bias in how assessments are being conducted.

In this context, PRD focuses on measuring whether there is an equitable approach to property assessments that aligns with market values across various price ranges. By understanding PRD, appraisers can determine if there is a disparity that might indicate unfairness in how properties are appraised, thus making it a crucial tool for maintaining an equitable assessment process.