Nearly 20,000 Ventura County homeowners who bought their properties since mid-1988 will receive tax cuts of as much as 25% beginning in July because of slumping real estate values, the county assessor said Thursday.
Assessor Jerry Sanford said the recession in the real estate market has sapped $500 million to $600 million from the value of homes purchased in the last three years. He said 85% to 90% of those 22,000 homes are affected.
On average, their assessed value will drop by $30,000, resulting in a $300 average property tax cut, Sanford said. He said homes bought before prices began soaring in 1988 are still worth more than their original cost.
As a result of lower assessments, county and city governments and school districts will lose about $6 million in tax revenues in the fiscal year beginning in July, Sanford said.
County and school officials said, however, that the loss will be more than offset by taxes from new construction and the reassessment of homes sold in 1990 that were previously taxed far below market value under Proposition 13.
The tax cuts may come as small consolation to homeowners whose property is worth less than they paid for it. Many homeowners will not want to hear that their property values have fallen, in spite of the tax savings, Sanford said.
"I get chewed out by as many people for lowering their property values as for raising them," Sanford said. "They think it makes them look like they were not smart or made a bad buy."
But the Ventura County housing market, as in many California coastal counties, took a dive last year after a torrid run-up in prices in 1988 and 1989.
The median price of a Ventura County home fell from $247,660 in 1989 to $238,790 in 1990, a 3.6% decline, according to the California Assn. of Realtors.
Sanford said that about 10% to 15% of the 22,000 homes sold in Ventura County since mid-1988 have held their value or appreciated slightly. Some homes have lost up to 25% of their value in the last two years, Sanford said, although housing prices in some areas, such as Ojai, have remained fairly steady.
Marlin Buirge, president of the Oxnard Harbor Board of Realtors, said some homes that sold for $200,000 as recently as seven months ago would sell for $185,000 today. He said his real estate office would have three or four homes listed for sale in 1989, when homes sold rapidly, compared with 32 listings Thursday.
The value of the county's industrial and commercial properties has remained fairly constant despite the onset of a nationwide recession, Sanford said. "Commercial and industrial real estate generally lags behind the residential market," he said.
Sanford predicted that residential property values will continue to decline for another 12 to 18 months, which may require widespread reassessments next year also.
"A real estate market generally goes down before a recession, and it takes a while to recover before the recession is over," Sanford said.
Sanford said his office has gotten 50 to 100 phone calls daily from homeowners wanting to know if their taxes will be lowered because of the depressed values of their homes.
The assessor's office will automatically reassess all residential property sold since 1988. The reassessments will be done between March 1 and July 1 based on computer records of sales of comparable neighboring homes.
Under Proposition 13, the purchase price of a home becomes its tax base, which can be increased no more than 2% annually regardless of market value. In cases where the assessed value is lower than the purchase price, the homes will be reassessed every March until the assessed value again exceeds the purchase price. The purchase price will then be used as the tax base.
The county's property tax base was $36.2 billion in 1990--$24.3 billion in residential property and $11.9 billion in commercial and industrial property. The tax base will grow to a projected $39 billion this year because the $600 million in deflated value on the affected homes will be offset by $2.7 billion in new buildings and resales.
County Budget Manager Bert Bigler said county property tax revenues will increase about 7% in the 1991-92 fiscal year compared with a 12% increase this year over last.
Ventura County schools will not be directly affected because any decline in property taxes will be made up by additional state aid, said Ken Prosser, director of school business for the county superintendent of schools. The county's school districts would be affected only if total property tax revenues decline statewide, he said.
About 4,000 residential properties were reassessed last year as the real estate downturn was taking hold, Sanford said, with the assessments lowered on 3,000 properties.
Before last year, assessments were lowered on a wide scale in Ventura County only during the last recession in 1982, Sanford said. Assessments were lowered for about 3,500 condominiums.
Janey Messmore, president of the Ventura Board of Realtors, said homeowners who keep their property for the state average of seven years should see the market rebound and their investment bear a reasonable yield.
County Supervisor Maria VanderKolk said the tax revenues lost through the reassessment are a small price to pay for the chance for more people to buy homes.
"It's not necessarily good when values go up so much that no one can afford a house anymore," VanderKolk said.