SETTING THE RECORD STRAIGHT (publ. 5/24/2013, page A2)
A chart about rising home values in Santa Clara County incorrectly reported Palo Alto’s average median single-family home sale price for 2013. It is $1,002 per square foot.
The recovering housing market has a downside.
Tens of thousands of homeowners will see their property taxes go up significantly this year as rising home values restore some or all of their homes’ lost equity, Santa Clara County Assessor Larry Stone said Monday.
That prospect is clear from a countywide survey of median sales price increases over the past year released by Stone’s office. Increases range from 4 percent to 24 percent for single family homes and from 13 percent to 46 percent for condos.
It’s bittersweet news for homeowners who got a tax break that is now disappearing, including those in the hardest hit areas that are now seeing the biggest percentage increase in prices.
“Some of the lowest end areas in the county are experiencing the biggest increases in the property base,” Stone said.
They are among the many homeowners who bought during the bubble and got a break under the county’s Proposition 8, which states that when the market value of a home declines below what the owner paid for it, the assessor has to reduce taxes to reflect the drop.
When the value comes back, so does the taxes. For every $100 of gain in value, the schools and local government get $1 until the home returns to its original tax base. Property tax notices go out at the end of June.
“I think that for the people who got the rollback, it was a nice response to a difficult time,” said Colleen Badagliacco of Legacy Real Estate in San Jose and chairwoman of the Distressed Properties Task Force of the California Association of Realtors.
“The assessor giveth, and the assessor taketh away. There will be a bit of a shock in some quarters when the rates jump, but you can make the case that your property is going up as well,” she said.
The 136,000 properties receiving this break last year will decline to 90,000 this year, with the break getting smaller for three-quarters of them, Stone estimated. For those homes, taxes will go up more than the 2 percent cap provided for by state Proposition 13.
For the rest of the county’s 412,000 properties, taxes will go up 2 percent, plus local fees.
An assessor’s office table shows median sales price increases from a year ago in 25 areas roughly bounded by school districts, which the office uses as one tracking tool.
There are some “startling” differences among neighborhoods, Stone said. For example, Mountain View values gained 3.5 percent over the prior year, while next door Sunnyvale gained 22.9 percent.
The information is based on market transactions, but don’t use it to try and predict your next tax bill. Many other factors, including location, school district, age, number of bedrooms and quality influence property values, Stone said.
The table shows condo sale prices jumping 39.3 percent in South San Jose, 46.3 percent in the Franklin-McKinley area of San Jose, 41.9 percent in the Berryessa area, 36.7 percent in Oak Grove and 25.5 percent in the Alum Rock area. The countywide average was 24.1 percent.
Single family home prices were up 12.9 percent in Alum Rock, 14.8 percent in Evergreen, 11.2 percent in Palo Alto and 17.8 percent in Willow Glen. The countywide average was 12.7 percent.
The assessor said the map was released as part of an effort at transparency and because it’s interesting market information for homeowners.
“The market has been improving almost overnight for residential properties,” Stone said.
“What’s fascinating about this is that condos, in terms of percentage increases, are leading the way,” he said. “That’s likely because condos took the biggest hit during the recession, and now they are recovering to a bigger extent,” than single family detached homes, which fell less.
Condos, and homes in areas hit by foreclosures and short sales, have seen the biggest investor activity too, he said, helping fuel price increases.
“It does add a short-term stability to the market, but long-term I think it presents substantial risks to the market. At some point, these folks are going to be bailing out of these investments,” he said.
Contact Pete Carey at 408-920-5419. Follow him on Twitter.com/petecarey.
