Real Estate Articles
Santa Clara County Assessor Worries as Property Values Drop This Year
Santa Clara County Assessor Larry Stone says he's seen everything of the highs and lows of the market, but admits he is particularly troubled about current market conditions, as property values continued to erode this year.
At a recent Silicon Valley Association of Realtors tour meeting in Los Gatos, Stone said last year, in accordance with Proposition 8, which requires the assessor to temporarily reduce a property's assessed value if its market value for the year falls below its Proposition 13 factored base year value, his office reduced the assessed value of 45,000 properties, 90 percent of which were residential, resulting in a reduction of $5.3 billion from the county's assessment roll. There was an average reduction of $78,000 per residential property and $3.4 million per commercial property.
Stone said the condo/townhome sector received the greatest impact, as one out of every five or 21 percent, was assessed below the purchased price. While the reduction in property values was not evenly geographically distributed, for the most part, the cities of Los Gatos, Saratoga, Palo Alto, Cupertino saw a little reduction, but the areas of east and central South Jose, Gilroy, Morgan Hill, Milpitas were hit the hardest.
This year, it's much worse, according to Stone. As his office closed the roll July 1, based on values taken on January 1, 2009, Stone said he had to reduce the values of 89,000 properties, of which 771 were commercial, thereby reducing the assessment roll by $17.4 billion. Stone said one in every five single family homes and one in three condo/townhomes were affected.
"Every community has been impacted," he announced.
To underline the problem, Stone noted up until this year, the decline in assessment growth had been gradual. "This year, it was like falling off a cliff," he remarked.
In 2006, the county's assessment roll grew 9.6 percent; in 2007, 8.3 percent; in 2008, 7 percent. This year the county experienced a net negative of about 2 percent, with less property tax revenue in real dollars, he said. It has only happened four other times in the county's history - in 1978, and three times during the Great Depression.
"It's monumental," Stone said.
Stone indicated Santa Clara County is still faring better than most counties in the state and in the nation, but the global economic problem and credit crisis have impacted real estate and property values significantly. For conditions to get better, corporate profits need to improve; unemployment has to come down; jobs need to grow; credit liquidity, which fuels a capital society, has to return; inventory of REOs needs to be liquidated; and public confidence has to return. The latter cannot happen unless the first five occur, Stone said. Till then, he said expect government services to be greatly reduced in every aspect – parks, libraries, education and public works.
In June, the county's 465,000 property owners received their assessment notification cards. Stone takes pride in being one of 10 county assessors in the state who sends out assessment notification cards early. He said homeowners should be aware that the market value of a property has to drop below the assessed value before they can seek a property assessment reduction, and the time to take note of comps begins from the lien or valuation date, which is January 1. Homeowners have between July 2 and September 15 to file a formal appeal.
"If you don't file by September 15, I can't help you," Stone said.
Stone said homeowners can visit the county assessor's Web site at www.scc-assessor.org to download the appeal form and obtain the latest news and information on property tax laws and regulations.
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Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.