I talked to the City Assessor about why the assessments had fallen 6-13% in the neighborhoods I was looking to buy in. He said the assessment does not reflect any environmental change (big new development or something that would dampen values). He said the drop probably reflected a lag from sales over the past two years. Those sales (which inform the assessments) may have been more foreclosures sold at lower prices, or older sellers anxious to sell at a lower price. He did not really encourage me to use the assessment in making an offer. He said the usual things that if I like the house (good condition etc.) and the neighborhood is well-maintained, then I should not be concerned about the assessment as an indicator.