County’s Property Values Up Despite Market Slump

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Despite rapidly falling home sale values, the total assessed value of L.A. County properties actually rose 6.9 percent last year to $1.1 trillion, according to figures released Tuesday by the L.A. County Assessor’s Office.

The increase was slightly ahead of the 6 percent rise Assessor Rick Auerbach projected several months ago and provides an unexpected dose of good news for beleaguered local officials facing massive budget shortfalls. One percent of the assessed value of each property goes to local governments in the form of property tax revenues.

Assessed property values rose most in well-heeled cities like Beverly Hills and Santa Monica, while distant Lancaster recorded the smallest increase. No city saw an absolute decline in assessed value last year.

Part of the increase was due to the fact that home prices were still rising in the early part of 2007. Many commercial and multifamily income properties also saw market increases for most of last year.

Auerbach said a bigger factor, however, was that even in a falling home price environment, most of the properties that changed hands last year were still worth substantially more than when they last changed hands.

Under Proposition 13, when a property changes ownership, it is reassessed at the current market value, which then becomes the new base year. The assessed value can only increase 2 percent a year until the next change in ownership. “Most of the properties that did sell had older base year values,” said Auerbach, who expects next year’s increase to be much smaller.

Beverly Hills saw the greatest percentage increase among the county’s 88 cities, at 11.8 percent, thanks to high-value residential property sales. Coastal Santa Monica came in second at 10.8 percent, thanks in part to the rebuilding of St. John’s Hospital. Pasadena, San Gabriel and Hidden Hills all saw increases of at least 10 percent.

On the low end, Lancaster eked out a 0.4 percent gain as it was hit by the double-whammy of a large inventory of unsold homes and high energy costs making long commutes undesirable. The San Gabriel Valley city of Duarte came in at 1.3 percent, followed by Palmdale at 2.1 percent.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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