Hot Housing Sales Fueling Rise in Local Assessments
If the real estate market is on fire, can the tax man be far behind?
In Ventura County, the answer is no.
Driven by red-hot housing sales, property values across the county are on the rise, ringing up a modest windfall for local tax collectors.
Overall, the assessed value of local properties rose 4.9% last year--about $1.9 billion--the largest increase since the early 1990s when the housing market went soft.
And the big money may be yet to come.
Because values were fixed as of New Year’s Day, the assessment does not reflect hefty increases that have occurred over the past six months as housing sales have kicked into high gear.
“Just wait until next year,” said Daryl Brown, chief deputy in the county assessor’s office, which sets the property values reflected on residential tax bills.
“We are seeing increases around the county,” Brown said. In his government center office, he sat surrounded by stacks of reports detailing the value of taxable property from sailboats to citrus trees. “If I were to rub my crystal ball, I’d say things are picking up.”
Brown said most of the increase has been generated by changes in property ownership. Ventura County housing sales have skyrocketed over the past year, edging closer each month to record levels.
With some exceptions, the assessor’s office sets a new value on a property--based on the current market value--each time it changes hands.
But owners of some properties sold are also seeing their assessments creep up. Those properties had received lower assessments in recent years to reflect plummeting market values. In some pockets of the county, values for such properties increased thousands of dollars in the past year alone. That will translate to a bigger tax bite for their owners in the next fiscal year.
“As the market has progressed, the value has gone back up,” said James Mahin, a Methodist minister in Camarillo who has seen his property value rise nearly $6,000 after getting it lowered to $247,000 in 1994.
“It’s an accurate appraisal of what is happening in the marketplace,” he said. “And I think it’s going to keep going up.”
After several years of double-digit increases, assessments began a long downward spiral in fiscal 1991-92.
Over the past few years, taxable values were nearly flat. In 1996-97, they increased 1.3%--the smallest rise since the Proposition 13 tax rollback in 1978.
That began to turn around last year, when the assessor’s office reported a 3.3% boost in assessed value.
For fiscal year 1998-99, the assessor is reporting a 4.1% increase for a total of $47.9 billion of taxable value. That includes assessments on 229,542 parcels, 18,304 boats and 833 aircraft.
It also reflects the temporary reduction in value on 73,473 parcels--including 9,000 added by the county this year--under a state proposition aimed at aligning property values with market values.
“The housing market is not a blanket covering Ventura County,” said Brown, adding that assessments for those properties dropped a total of $62.4 million this year. “It’s still spotty in a lot of places and we’ve been out looking for those areas” to reduce property values.
North Oxnard resident Mary Nash is among those property owners. Without really understanding why, she found her temporary property value had decreased thousands of dollars this year compared with last year.
“I figured it would go up because property values were supposedly going up,” said Nash, who has ridden a roller coaster of fluctuating property values over the past decade. “There’s really no rhyme or reason to it. But it’s good that we’re getting a tax break.”
The tax breaks stem from a time when the housing market turned sour in the early 1990s, dragged down by a recession-plagued economy that is now just barely swinging toward recovery.
As property values plummeted, Brown said, the county launched an aggressive effort to help homeowners.
“We knew they were out there, we didn’t wait for them to come to us,” he said. “We went out and found them.”
As a result, the assessor’s office was swamped by requests from thousands of homeowners seeking a reduction of their property values, and consequently a break on their tax bills.
In 1996, there were about 6,000 appeals awaiting resolution. There is now a backlog of fewer than 1,000 appeals and those are expected to be resolved by next summer.
County officials acknowledge, however, that rising property values could spur more appeals.
Thousand Oaks real estate agent Marc Smith is bracing for the increase. He appealed the assessment of his Thousand Oaks townhouse in 1994 and got it down to a value of $140,000.
It hasn’t shot up significantly since. But he knows real estate. And he knows that eventually the hot housing market will mean an increase in his tax bill.
“It’s funny, when property values go up they have no problem raising the assessments,” he said. “But when they go down, you have to write an appeal and fight it. It doesn’t seem fair.”
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Assessment Roll Value Change *--*
YEAR Dollar Amount of Change % Change 1981-82 $2.21 17.2 1982-83 $1.94 12.9 1983-84 $1.15 6.7 1984-85 $1.77 9.7 1985-86 $1.92 9.6 1986-87 $1.94 8.9 1987-88 $2.87 12.1 1988-89 $2.85 10.7 1989-90 $3.84 13.1 1990-91 $4.51 13.6 1991-92 $2.05 5.4 1992-93 $1.73 4.3 1993-94 $921 million 2.2 1994-95 $632 million 1.5 1995-96 $659 million 1.5 1996-97 $590 million 1.3 1997-98 $1.45 3.3 1998-99 $1.92 4.2
SOURCE: Ventura County Assessor Note: Dollar amounts in billions unless otherwise indicated.