The net assessed value of all property in Santa Clara County grew a mere 0.18 percent from last year, marking the smallest increase in 31 years, the county finance agency reported this week.
The $303.9 billion assessment roll, which reflects the assessed value of all property as of Jan. 1, 2009, increased just $542 million. It is the smallest rise since Proposition 13 passed in 1978.
Though overall property values remained flat, northern Santa Clara County experienced a hike in values. Palo Alto's assessed values increased by 3.78 percent, while values in neighboring cities such as Mountain View (6.22 percent), Los Altos Hills (2.88 percent) and Los Altos (4.27 percent), displayed similar patterns.
"These areas typically have fewer starter homes," said David Ginsborg, deputy to the assessor. "If you have a newer home (bought in the past few years), the assessed value is more likely to have decreased."
The negligible growth marks a significant shift.
"To put this in perspective, the assessment roll grew by nearly $20 billion last year," County Assessor Larry Stone said. "In 2001, the apex of the dot-com boom, the assessment roll grew $27 billion."
Assessed values in Santa Clara County follow market conditions.
"Because the market values of properties have declined, we are responding by decreasing assessed values where appropriate," Ginsborg said.
2009 is not the first year assessed-value growth has declined. It decreased from 9 percent in 2006 to 8.25 percent in 2007 and hit 7 percent last year.
Stone predicts Silicon Valley will continue to observe declining growth rates.
"Next year may be worse since most of the declines this year are attributed to the soft residential market," he said. "The steepest decline in commercial-property values is ahead of us."
Some 90,000 homes lost assessed value this year, out of a total 400,000 homes countywide. The average loss for a home was approximately $170,000, causing a net $17.4 billion reduction in the county's assessment roll.
In Palo Alto, 897 properties declined in value by an average of $248,000, according to Ginsborg. The majority of those properties are homes.
Home foreclosures contributed to the decline in value of the assessment roll. When foreclosed homes are sold, the purchase price is often lower than prior assessed values. Foreclosures in 2008 jumped four-fold, to 6,200 homes countywide.
The stagnant roll growth rate is especially surprising given the automatic increase in assessed property values Proposition 13 mandates, officials said.
"The way the proposition works is that if you buy a home, your purchase price is likely to be the assessed value," Ginsborg said. "Every year after that, we add no more than 2 percent to the assessed value of your house."
In contrast to Palo Alto, Gilroy values diminished to a low of -9.48 percent and to -4.73 percent in unincorporated areas of the county.
Geographic differences in the county's roll reflect a spread of 16 percent.
"It underscores the geographic variance in property values and reflects the housing boom and bust," Stone said. "The communities with the most newly constructed, entry-level housing suffered the greatest impact. In contrast, more established communities like Palo Alto and Los Altos had proportionately fewer properties in decline."
Last week, the Assessor's Office mailed more than 460,000 assessment notification cards to property owners, in advance of a September mailing of the 2009-10 property tax bill. Property owners who believe the market value of their property is less than the amount shown on the card are asked to contact the Assessor's Office by Aug. 15.
A request for a review can be made through the Assessor's website and should include the property owner's opinion of the value as of Jan. 1, 2009.