What goes up......

Recently, I received by tax bill in the mail. In our province (Ontario), the amount of residential taxes charged by the municipality is predicated by the mil rate which is a multiple of the fair market value of your home. Being in real estate for approximately 30 years and the owner of an office with 25 knowledgeable professionals, I do know, or at least have access to, a lot of information about the value of homes and properties in our area. As a result, I thought there was a significant difference from what MPAC thought my property was worth and what I thought I could get for it in today's market. Armed with compelling evidence, I challenged their assessment and ended up in a discussion with one of their senior people. Basically, I was told that their appraisal model had a 5.6% increase built into it based on national and provincial figures established about 2 years ago and I had nothing to worry about if my increase was below that average (it was not). I pointed out that unless they never opened a newspaper, television or computer, real estate values have decreased...globally. I was told, essentially, that their model was not built for decreasing values!
Perhaps this thinking and this model have been the root cause of our current economic malaise. The sub-prime mess south of the border, Wall street, GM, Ford and Chrysler have all built their models on the premise that what goes up will continue to go up. Maybe we have to pay more to find CEO's that understand that what goes up.....must come down!