The Boston Globe reports on home prices. "Falling prices have created a new twist in the suburban Boston real estate market: More homes are selling for less than their assessed values. Massachusetts house prices slumped 3.5 percent in July, the biggest monthly drop since 1993, as a slowdown in sales brought about by rising interest rates created a glut of homes on the market."

"As a result, home prices are falling below assessments, which are the estimated values communities place on homes to determine property taxes. For the past five years, most homes sold well above their assessed values because prices were rising faster than assessments, which typically are at least a year old."

"In today's declining market, some homes are now selling for less than the assessed value in stable communities like Newton, and in volatile markets such as Lowell. 'Before, it was, pay no attention to that assessment. Now it's, pay no attention to that asking price,' said Bill Wendel, owner of a Cambridge fee-for-service brokerage firm."

"'Great entry-level property. Priced below assessment. WHAT A GREAT WAY TO START,' reads a March listing for a Colonial near Newton Center priced at $499,000. Agent John Milligan's said he hoped the advertisement 'might just motivate someone to make a phone call.'"

"One of Sriram Nookala's 'primary criteria' in his search is a house priced below its assessed value. 'If the seller is interested in moving the house off the market, they make pretty aggressive reductions and usually those come under assessed value,' Nookala said."

"In the $1 million-plus housing market in Greater Boston, sales plunged 62 percent this year, according to the listing database MLS Property Information Network. The drop is making it 'routine' for assessments to exceed asking prices in that market, said agent Terry Mailtland, causing problems for sellers whose assessments are so high that buyers perceive a big tax bill as 'an impediment to a sale.'"

"If house prices continue falling, assessments eventually have to follow. But 'the taxes will always go up,' said Richard Simmons Jr., the assessor for Belmont, a wealthy suburb northwest of Boston. City officials determine the size of the budget and assessors are free to increase the property tax rate to compensate for falling assessments."

"'I don't want people to say, 'My values are going down. My taxes are going down,' Simmons said. 'That's not going to happen.'" "Diane and Richard Schmalensee view a slightly higher assessment on their home overlooking Chestnut Hill reservoir as a selling point. The house was put on the market in October for $2.95 million. In May, they dropped the price to $2.75 million, below the $2.84 million assessment."

"'Right after we bought this, the prices began to shoot up, and we said, `Aren't we lucky,' said Diane Schmalensee. With the market in decline, she realized perhaps 'we waited a little too long' to sell."