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.]