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Trending is a reassessment of real property based on a statistical sample of sales of similar properties. For example, in a housing unit of 150 houses, if 20 were sold in the past two years, the ratio of selling price to assessed value would be computed. Let's assume the average ratio is 105%. If the data from these sales pass statistical tests showing the average is indicative of the whole, all 150 properties' assessed values would be increased by 5% over the current assesed valuation without a physical inspection. This process may work well for housing developments that are similar in age, type and construction, and with sufficient sales data. However, Indiana law permits commercial and industrial property to be assessed in the same manner, which may be problematic due to lack of sales data on similar properties. In some cases, assessors will have to use other means to reassess the property, such as the income or cost approach. The income approach estimates assessed value based on the amount of income a property can be expected to generate. The cost approach estimates assessed value based on the cost to construct the improvements, less an allowance for obsolescence. For counties with TIF Areas, trending will require annual base value adjustments to "neutralize" TIF revenue. This calculation will have a direct effect on the accuracy of Net Assessed Values for all taxing units and the actual amount of TIF Revenue collected. The trending process required by the Department of Local Government Finance is as follows:
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