Property values fall in L.A. County for first time in 13 years [Updated]

For the first time in 13 years, the overall value of property in Los Angeles County has declined, according to a report released this morning by the county's assessor's office.

 County property rolls lost about $1 billion in value last fiscal year -- losses driven largely by downward reassessments of homes as the housing market has slumped. The value of all property in the county is now $1.1 trillion, a .09% decrease compared with the year before, according to the assessor's annual report.

Setting aside tax-exempt property such as churches and nonprofit hospitals, the drop increases to half a percentage point.

The drop marks a step backward for a county where the property rolls had been increasing an average 7% in value since 1996. Even so, county officials said L.A. has fared better than some other Southern California counties.

“Home values have declined and foreclosures are up,” Assessor Rick Auerbach said in a statement released today. “But not to the same extent as in neighboring counties. The real estate market is still a vital part of Los Angeles County’s economy.”

The report found communities with the biggest drops in value were: Lancaster (-15.4%), Palmdale (-14.9%), La Puente (-7.8%), Hawaiian Gardens (-7.7%) and Norwalk (-7.3%).

The two most-populated cities in the county, Los Angeles and Long Beach, also saw decreases. In Los Angeles, values dropped .10% to $413.4 billion total, excluding tax-exempt property. Property values in Long Beach decreased 2.9% to $43.9 billion.

Cities that saw the greatest increase in property value last year included commercial hubs such as Irwindale (8.7%), Vernon (8.1%) and the city of Industry (7.2%), as well as exclusive Beverly Hills (6.1%) and Malibu (5.9%).

The decrease in overall property values countywide was not a surprise to county officials. Earlier this year, Auerbach undertook a massive reassessment of 333,870 single-family homes and condominiums that lowered property values by about $40 billion.

That loss was offset by, among other things, $16.3 billion in added value due to property transfers, $15.3 billion in annual Proposition 13 inflation adjustments, and $6.9 billion in new construction, according to the report.

The last time property values dropped countywide was during the recession of the mid-1990s. Property values dropped 1.7% in 1995 and .20% in 1996 before rebounding, said Robert Knowles, a spokesman for the assessor’s office.

Knowles said of the latest drop in property values: "This has a lot more to do with foreclosures and overdevelopment in the Antelope Valley. They built all these houses, then they couldn’t sell them and the foreclosures kicked in."

[Updated at 1 p.m.: Last year, the median market value of a single family home in L.A. County was $350,700, about $141,300 less than the year before. In 2007, median home values fell by $18,000 after climbing in previous years.

Auerbach is watching to see if the surge in residential reassessments spreads to commercial real estate, which he expects. Commercial properties make up 31% of this year’s property rolls.

A week ago the county began accepting reassessment applications. Property owners have until Nov. 30 to file. So far, the assessor has received about 1,800 applications from commercial property owners, Auerbach said.

He added that he would like to do a large-scale reassessment of commercial properties, but does not have the staff.

“We just don’t have the time and residential properties will have to be handled first,” Auerbach said.

County leaders are watching to see how much ongoing reassessments will hurt the tax base, said Ed Corser, budget manager with the county’s chief executive office.

“Property values have already dropped significantly and that still needs to bleed through to the tax base,” Corser said.

Some studies have shown county property rolls could drop 6% by 2011, Corser said — the same year the county will face $100 million in added pension costs.

“That’s when it will all hit home,” Corser said.]

-- Molly Hennessy-Fiske

Comments

[Capt Obvious]

Repeal Prop 13. It is undermining the ability of municipalities to allocate resources and allow for service planning.

[Smi2le]

California cities and counties can obviously no longer afford six figure salary and benefit packages, and 90% early retirements for police and fire fighters.

[ChargerFan]

I love it. The less tax money of any sort the den of thieves (senate and assembly), the better. I am absolutely sure they will make up for it by raising all sorts of hidden taxes.

[Josh]

Why don;t the proponents of prop 13 simply admit that they are anarachists? They want to starve government, and think that any cuts, no matter what, are superior to raising a dime in taxes.

When poverty increases, crime increases, and quality of life for everyone takes a steep decline, and your property values continue to decline, and your quality of life continues to decline, perhaps then, that will be enough?

[True Freedom]

whatever city you live in, check out the Housing/Land Use Elements of your city's General Plan. It is likely your planning commision is updating the Plan to create even higher density housing... which will further put downward pressure on home prices, increase traffic and pollution, and further erode our life here in LA. Check it out for yourself...

[BW]

It's no real loss due to the fact that the property values were too inflated to begin with (thanks to greed). Stop blaming Prop 13. It has nothing to with this mess. The problems lie in Sacramento. They are the ones that got this state into this mess.

[Maximous]

What about the other LA County Cities such as Santa Monica, Culver City, Venice, etc., etc.?

[Mike]

Californians need to realize that if you want services, you need to pay for them. Prop 13 is turning out to be a budgetary disaster, and on our initiatives and referendums we keep voting for more pet projects but less revenue. Hello? Have you ever tried to balance your own finances? If you want stuff, you need to pay for it. This would include good roads, good transportation and good education. If you want less and less tax revenue all the time, be prepared for everything to continue to deteriorate in our once-glorious state. This isn't difficult to get your mind around; it's basic arithmetic.

[Mike]

BW, pull your head out of the sand and engage in two or three minutes of critical thought. Try comparing what an L.A. homeowner pays in property tax to what a homeowner pays in tax for a comparable house in any other major city, and you'll see what the problem is.

[thecanimalshusband]

What do we tell the children?

[Vladimir Orlovsky]

Property values fall in L.A. County for first time in 13 years :

`It's no real loss due to the fact that the property values were too inflated to begin with
thanks to greed !! ... and stupidness of our leaders.`
...I think this is very clear...
what do you think...Mr. governor ?!

[riposter]

With this change there has been a 7 year growth of assessed valuation of 63.4%, according to the assessor's document with a corresponding rise in tax revenues, excluding any tax overrides that have been enacted. Prop 13 certainly creates huge amounts of unfairness between taxpayers but those who say it has starved government are delusional or dishonest.

[Taxpayer]

It's interesting to see how many posts are planted complaining about Prop 13 the minute the state budget comes into discussion.

But it does not follow at all that Prop 13 had any play in this, if anything it has averted a much bigger catastrophe. If the tax were allowed to increase according to the bubble prices, we would have had a budget that had grown accordingly to 200-300% of what is today, and if you think 30 billion deficit is a problem, I'd like to see what you do you get out of a 100 billion hole.

Prop 13 kept government budget growth in check as much as it could. That is in no way a bad thing, because our state, just like the people who live in it, seem to be unable to think beyond tomorrow and will spend everything they have today without saving a dime, ever.

[Lt. Two Cents]

I don't get a pension. Who gets a pension? Everyone I know in the private sector has self-inflicted 401k for retirement these days. Pensions??? Really?

[Duboiz]

Still overinflated by 30%!

[r.cumbe]

Amazing to read comments against Prop 13. You people have no idea how much that has saved responsible people. My parents would have been taxed out of their homes if it wasn't for that proposition, and California would have blown even more money. Prop 13 was created with the smart and responsible person in mind, not the gambler and house flipper that has recently evolved.