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Uploaded: Wednesday, August 19, 2009, 5:03 PM

Palo Alto properties buck the down-market tide
County assessor calls overall growth 'remarkable'

Posted by Old Palo Alto, a resident of the Old Palo Alto neighborhood, on Aug 19, 2009 at 6:58 pm

What this means is the county assessor is over charging Palo Altans for properties that should be reassessed for current market conditions.

Posted by Ugg, a resident of the Fairmeadow neighborhood, on Aug 19, 2009 at 8:00 pm

I suppose this is warning us of another property tax increase.

Posted by Google geek, a resident of Los Altos Hills, on Aug 20, 2009 at 7:37 am

From the DataQuick June sales figures:

Community Zip Sales % Chg Median Price % Chg High Price $/SqFt % Chg

Palo Alto 94301 25 4.2% $1,687,500 1.3% $2,837,000 $905 -11.2%

Palo Alto 94306 28 -20.0% $1,028,000 -20.0% $1,935,000 $694 -25.3%

Yes, Palo Alto prices are DOWN somewhere between -11.2% and -25.3%.

Get your facts right Palo Alto Online.

Posted by Facts not wrong, a resident of the Barron Park neighborhood, on Aug 20, 2009 at 8:02 am

"From the DataQuick June sales figures:

Community Zip Sales % Chg Median Price % Chg High Price $/SqFt % Chg

Palo Alto 94301 25 4.2% $1,687,500 1.3% $2,837,000 $905 -11.2%

Palo Alto 94306 28 -20.0% $1,028,000 -20.0% $1,935,000 $694 -25.3%

Yes, Palo Alto prices are DOWN somewhere between -11.2% and -25.3%.

Get your facts right Palo Alto Online."

This data can be very misleading because it lists the differences in sales, not the differences in value of the same properties. For example, if in one month only small homes and condos are sold in Palo Alto, it would look like the prices are down significantly even if the value of homes is still increasing.

The original report cited by PA Online is actually the correct way (well, at least more correct than average sales figures) to assess the value of properties. If you want to go by sales figures, you would have to compare same-house sales and see if houses now are selling for less than they were purchased for.

Posted by Chris Zaharias, a resident of the Crescent Park neighborhood, on Aug 20, 2009 at 8:24 am

Homes are homes, and if the market for smaller, less expensive homes has more volume of sales than the market for larger homes, that means not only that home prices are going down, but also that larger, more expensive homes are less desirable.

Less desirable is followed by price reductions when transactions actually start to occur, so whether or not the sales figures show this, PA home values *are* down.

Posted by chris, a resident of the University South neighborhood, on Aug 20, 2009 at 11:16 am

The assessors values are as of January 1, not today, so they are lagging the downturn in the market.

Also, properties in Palo Alto generally turn over slowly so many have a long way to go to catch up to their current value, because the increase in assessed value has been limited to 2% for many years.

Posted by Array, a resident of , on Aug 20, 2009 at 11:32 am

Palo Alto, like Los Altos, is a community where many of the older, smaller homes that are sold are subsequently torn down. New large homes are built in their place. This factor has a tremendous upward effect upon average assessed value.

In addition, the average assessed value of homes are decades behind actual value. Therefore, when a home sells, the assessed value often doubles or triples. The current average of assessed value has nothing to do with the current decline in average sales prices.

Carol's facts are correct.

Posted by Another Data Point, a resident of the Old Palo Alto neighborhood, on Aug 20, 2009 at 11:34 am

We've been going back and forth about selling our (Old PA) house for the past couple of years.

The recommended listing price that real estate agents have given us for our house has fallen about 20-25 percent over that time period.

The selling prices in our neighborhood seem to confirm this magnitude if price change from our very interested casual observations.

Posted by Kate, a resident of the Duveneck/St. Francis neighborhood, on Aug 20, 2009 at 12:08 pm

The San Jose Mercury News lumps all of 94303 together even though one-third or more of Palo Alto is in 94303 and the rest in East Palo Alto. So the statistics are skewed. And according to Prop 13 FOR EVERYBODY, property taxes can only go up 2% plus any new bond issues taxes added on such at the one for Foothill-DeAnza college or PAUSD school bonds. Still the lump sum can only go up after that at 2% per year. Before Prop 13, property taxes were going up as much 15- 25% and higher each year. Homes sold after 1978 had the initial property tax at 1% of the sales price THEN the property tax can only go up 2% a year. IF the property has seriously fallen in assessed valuation, then the owner can petition the county assessor for a reduction in the assessed valuation.

Posted by palo alto mom, a resident of the Embarcadero Oaks/Leland neighborhood, on Aug 20, 2009 at 6:10 pm

Using the apple to apples approach (similar houses, same neighborhood, similar lots, etc.) our house value has dropped 15% in the past year.

The one funny item missing from the equation is that most of the higher end homes don't publish the sales price of the house, (some even going so far as to pay to keep the data out of even MLS) which really skews the results.

Posted by Resident, a resident of the Charleston Gardens neighborhood, on Aug 20, 2009 at 6:22 pm

Ironically, I live in the farthest South-east corner of Palo Alto in Charleston Gardens. Historically we have had the lowest valued houses in Palo Alto but this year our property values have gone up. Three of the very smallest Eichler homes have sold for over $1 Million. Houses in excess of $1 Million are rare in this neighborhood of small Echlers and Williams & Burroughs homes built in 1951.

Posted by Tobby, a resident of the Greenmeadow neighborhood, on Aug 21, 2009 at 9:17 am

Remember, assessed values are based on 2008 values. There is a good year of lag built-in. The flip side to this is that as property values were going up, the lag kept taxes lower. Also, commercial real estate has been hammered this year, so expect a big drop next year in total assessments.

Taxes are still tied to PROP 13 though, so won't be going up too much. Still a great place to live if you bought here pre-boom.

Posted by Amie, a resident of East Palo Alto, on Aug 21, 2009 at 3:39 pm

Priming the pump for another tax increase. Their getting exactly what they voted for and deserve.

Posted by S T, a resident of the Crescent Park neighborhood, on Aug 22, 2009 at 5:55 pm

That is flat out wrong.

I know houses (plural) that are down about 20percent from their 2007 peak.

Why should we be concerned about that when in the two years preceeding the 2007 peak they rose by 40%?

Why do we have to live in denial of the facts?

Its OK. Unless you bought in 2006 or 2007 you are still ahead.

Posted by Jimmy Noh, a resident of the College Terrace neighborhood, on Aug 22, 2009 at 5:57 pm

Sure

But Palo Alto Unified School District will soon be making BIG HUGO cuts which mean big class sizes and less special Ed. Result is that Palo Alto will become a lot less attractive and people will move to surrounding areas where they can get twice as much house for less, pay less property tax and put their kids in private school with the spare change.

Posted by Outside Observer, a resident of another community, on Aug 22, 2009 at 8:42 pm

As long as fools have money, Eichlers will go for 7 figures in Palo Alto.

Posted by mp resident, a resident of the Downtown North neighborhood, on Aug 23, 2009 at 6:03 am

Anyone that follows the news closely has seen the spike in prime and jumbo mortgage delinquencies, 80,000 job losses in silicon valley, and a still depressed stock market. PA values will follow the rest of the country this year, as the pool of move-up buyers from other communities dwindles and people can't rationalize paying quadruple the price for a shack & lot that would sell for $100k in most of the country.

Posted by Phil, a resident of another community, on Aug 23, 2009 at 8:25 am

[Post removed by Palo Alto Online staff.]

Posted by I don't get it, a resident of Another Palo Alto neighborhood, on Aug 23, 2009 at 5:33 pm

Amie, who is "they", and what did "they" vote for that "they" deserve? I have lived in Palo Alto quite a while, watched in dismay as the housing costs grew ridiculously high based on the dot com bubble and speculation, and *I* didn't vote for something to increase my property taxes.