After three years of minimal or negative growth in assessed property values, the Santa Clara County, Assessor’s Office is reporting the first solid increase in assessed values since 2008. “Economists often describe economies in curves, but Silicon Valley’s economy looks more like a check mark. The real question is, will property values continue to grow up and to the right, or will flatten out,” said Assessor Larry Stone.
On Friday, the Santa Clara Assessor’s Office will mail 476,000 assessment notices to all property owners in Santa Clara County. The total net assessed value of all real and business personal property grew 3.25 percent to $308.8 billion. Property tax revenue supports public schools and local governments. Assessed values are used to create the annual property tax bills mailed to property owners in September.
The annual growth in the assessment roll is a combination of a number of factors including changes in ownership, exemptions, reductions when market values fall below the assessed values (Proposition 8), new construction, and the California Consumer Price Index (CCPI). The assessment roll also contains the value of business personal property, including machinery, equipment, computers and fixtures.
“During the past four years, the annual assessment roll has ranged from $303 billion in 2008, declining to $296 billion in 2010. This year’s assessment roll provides the first concrete evidence that the Silicon Valley economy is finally heading in a positive direction,” said Stone. The assessment roll is a snapshot, as of the valuation/lien date (January 1, 2012) of the assessed values of all real and business personal property in Santa Clara County.
“As a region, the economy has turned the corner. However, it is like a large train with the locomotive up front leading the way, while other parts of the train are still rounding the corner bringing up the rear. “The good news is the trend is in the right direction” said Stone.
The total gross assessed value of all real property (land and buildings) grew 3.13 percent. Particularly surprising was business personal property which grew 6.48 percent to $25.6 billion. That is still $1 billion below the peak during the dot com boom in 2001. The growth of business property is perhaps the best indicator that businesses are once again hiring new employees, leasing office space, and making major purchases of machinery, equipment, computers and fixtures.
The assessment roll growth was driven largely by improvements in the commercial and industrial sector, and a modest increase in residential property values. However, the outcome was uneven geographically across the County. “The front of the train represents the communities primarily in North Santa Clara County with South County trailing,” said Stone. The City of Mountain View and Cupertino grew 6.6% and 6.3% while the City of Gilroy declined -0.4% and Morgan Hill grew 0.01%.