Monday, April 27, 2009

Assessed values of 90,000 Silicon Valley homes sink average $181,000

Operation finds fir in man's lung
As median home prices roll back to nearly 10 year lows, reductions in Silicon Valley's 2009-2010 assessed property values -- to date -- represents an $18 billion reduction in property taxes to be collected for the period, the largest decrease in county history. And the assessor isn't finished.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - California's Santa Clara County (Silicon Valley) Assessor says when area homeowners get their annual property tax bill this June, at least 90,000 of them will find their property value has been assessed down an average of $181,000.

While that could slash homeowners' property tax bills substantially, local government (including schools, cities, the county, redevelopment agencies, community colleges, and special districts) will suffer significant cutbacks.

Property taxes paid by each homeowner amount to approximately 1.25 percent of a property's assessed value in Silicon Valley and the 2009-2010 numbers represents an $18 billion reduction in property taxes to be collected for the period, the largest decrease in county history.

"It is far more pervasive than I expected, and these preliminary numbers are far from final. While incomplete, this data is valuable to cities and schools as they plan their budgets," said Assessor Larry Stone.

As of January 1, 2009, approximately 20 percent of all single family homes and one-third of all condominiums have experienced assessed values that are below their purchase price.

The total number of properties facing assessment reductions is more than double the previous year and the average $181,000 reduction approaches three times the average $78,000 reduction last year.

It's not over

Additional reductions are anticipated between now and July 1, 2009, when the assessment roll is officially completed. Between January and June, the Assessor's Office is reviewing the assessed values of nearly 200,000 residential properties to determine if the market value, as of January 1, has fallen below the original assessed value (typically, the purchase price).

Changes in ownership in a declining market (especially foreclosures and other distressed sales), new construction and lowered values in business property factor into the lower assessed values. In 2008, the number of foreclosures jumped four fold to 6,200 homes in Santa Clara County, the assessor's office reported.

Richard Calhoun, broker owner of Creekside Realty in San Jose, says the median price of single family homes in closed transactions in March was $450,000 compared to $830,000 in March 2007, during the height of the housing boom. The current median is also less than it was nearly 10 years ago in March 2000, when it was $524,250.

"The first and last time the median sold price was near this level was January 2000, $433,500 and February 2000 $467,500," said Calhoun.

The lower median price reflects a preponderance of distressed property sales and more sales in lower priced markets within Silicon Valley.

Once all properties are assessed, the Assessor’s Office will mail an assessment notification card to every property owner. Homeowners are advised to wait until they receive their notification cards rather than deluge the assessors office with inquiries about assessed values.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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