[quote=Blogstar]Should they add the %2(or any percent) in seriously falling markets year after year?
What does prop 13 have to address assessments in falling markets. What does the State Board of Equalization have to say about the practice of raising assessments in falling markets? These are some questions that came up after looking at my tax bills while going through the appeal.[/quote]
Rus, CA Proposition 8 (not to be confused with Prop 8 – the more recently-passed gay marriage ban) obligates county assessors to look at values at the beginning of a calendar year to determine if they have actually risen 2%. Of course, in times of presumed appreciation, they do this via a “cursory check” by parcel map (most of which are HUGE, btw).
How does the proposition work?
When the market value of a property on the January 1 lien date falls below the factored base year value (assessed value), the assessor is obligated to review the property and enroll the lesser of the factored base year value or market value. The factored base year value of real property is the market value as established in 1975 or as established when the property last changed ownership or when the property was newly constructed.
A property that has been reassessed under Proposition 8 is then reviewed annually to determine its lien date value. The assessed value of a property with a Proposition 8 value in place may increase each lien date (January 1) by more than the standard two percent maximum allowed for properties assessed under Proposition 13; however, unless there is a change in ownership or new construction, a property’s assessed value can never increase above its factored Proposition 13 base year value after adjusting for the annual increase.
I’m glad to hear you were able to get a good settlement out of the assessor, Rus! I don’t know exactly what you bought but would guess that when you actually bought your parcel, there were decrepit and/or makeshift utilities brought up to it’s possibly barely habitable? dwelling and so it was assessed very low. When you eventually had to draw permits for everything, of course the assessor got wind of it through the Dept of Planning and Land Use. Your parcel was then reassessed at or near “boomtime” values and so was eligible for a large reduction in assessed value today but you had to formally ask for it and go through the motions.
I am cognizant that the values of many areas of the county, even those with hundreds of “luxury” properties, simply crashed in 2008 and beyond. This crash in value doesn’t make them any less desirable to live in (unless there are MANY unkempt foreclosed vacant properties within very close proximity). In your case, if there WERE a lot of distressed properties in your area, it is harder to tell from the road and adjoining properties, due to setbacks, lot elevations and less proximity to the neighbors. Bonita and Jamul come to mind here. Most of BOTH of these areas are absolutely fabulous (and private) to live in and are only 12-24 miles from dtn SD! I believe their values “crashed” deeper than other locations with less desirable houses and lots for three reasons. 1) because they both are a bit of a commute from major job centers and thus are full of retirees and work-from-home types; 2) Bonita is now surrounded by “competing” SFRs built since 2001 on smaller lots and encumbered by HOAs (with the vast majority encumbered by MR, as well); and, many Mexican nationals bought in Bonita and Jamul with “funny money” during the millenium boom (these locations have easy access to MX). And no, we’re not talking about “drug lords and middlemen/women” here. They were simply individuals without a SSN and US credit report who had a downpayment but couldn’t qualify for a mtg under a normal underwriting environment. When these Mexican potential buyers saw the type of property they could actually buy (large house on sprawling lot) within 10 miles of the US/MX border (to accommodate visiting family members from MX), they jumped at the chance to pay too much and didn’t understand their mortgages due to language barriers. When their payments began resetting, virtually all of them lost their properties to foreclosure (mostly in 2009).
In recent years, flipper teams and DIY people like Rus have come in and rehabbed the vast majority of these properties (often VERY quickly) and the flippers resold them for a $100K++ profit. IMHO, what the flippers are doing, in essence, is a community service which will eventually lift all boats.
It may take a few more years, but I feel values can only go up from here :=)
