The value of Los Angeles County real estate jumped 6.8% last year and continues to climb in 2001 despite signs of a softening U.S. economy, according to interviews and a report from the county assessor to be released today.
The increase in assessed real estate values last year marked the third consecutive annual increase of 6% or more recorded by the assessor's office.
Assessor Rick Auerbach said assessed residential real estate values continued to rise in the first half of 2001, although the commercial market stagnated. Indeed, the difference between the last assessed value of residential property and its sales price has been rapidly growing this year, the assessor said.
If the trend continues, Auerbach said, there will probably be similar growth of more than 6% for this year.
As described in the assessor's report, affluent Westside neighborhoods, particularly on the coast, saw their assessed values climb the fastest last year. Auerbach said these are generally the areas that had the biggest dip in property values during the recession.
El Segundo led in growth with a 13% increase. Much of the increase was in the commercial sector, the report said.
Following El Segundo were other Westside cities such as West Hollywood, Malibu, Santa Monica and Manhattan Beach. The gated municipality of Hidden Hills and the island town of Avalon also saw growth in value of 9.9% and 9.7% respectively.
The average value of a single-family home in the county reached $276,400 last year, an 8.7% increase. Meanwhile, the number of foreclosures in the county dropped by 33%.
The increase in assessed value translates into $40 billion in additional property taxes available to state, county and city governments. Auerbach said the amount of revenue is close to what his office had forecast, so budget officials have already factored much of the increase into this year's financial plans.
That is in sharp contrast to much of the 1990s, when declining real estate values ate into county and state revenues.
The booming economy has led the assessor's office to raise the assessed value of some real estate--and consequently the taxes on that property--by more than the 2% annual ceiling imposed by Proposition 13, the 1978 anti-property tax initiative. That's because if the assessed property values had dropped on a parcel, the assessor is permitted to increase the value by more than 2% to reflect the current market value.
Auerbach said his office has gotten some confused calls about the increases. "Once it's explained, the taxpayers mostly understand," he said.
Noting that increased real estate values help property owners, Auerbach said, "People see it as a mixed blessing."