Value of assets, land in county drops

For the first time in at least 30 years, the combined value of land, homes, and business within Tuolumne County has fallen.

According to a new report from the county Assessor-Recorder’s Office, county valuation has dropped $57.7 million, or 0.86 percent, over the last fiscal year.
   

The county’s valuation for fiscal 2009-10 comes to $6.62 billion.

Excluded in the calculations are federal lands and state-assessed properties, which includes some public utilities that cross county lines.

The valuation drop comes as no surprise to Assessor-Recorder Ken Caetano, who wrote the report. He said the decline in value comes largely from falling home prices, a trend seen throughout the nation due to the housing bust that began in 2007 and accelerated in 2008 and 2009.   

“The driving force behind the decline has been the sharp turnaround in the real estate market,” Caetano said. “Property values have dropped dramatically from the peak period we experienced just three to four years ago.”

Just this past year, Caetano’s office has reassessed 3,000 properties at lower values, with more such revaluations likely on the way. Caetano is obligated by law to ensure properties’ assessed value doesn’t exceed their market value.

Lower home prices mean lower property taxes — and less money for county government.

Depending on one’s view, this could be either a good or a bad thing, Caetano said.

“Looking at the government’s viability, there’s less money available from property taxes to perform the services people want,” he said. “But from a purely personal standpoint, for the taxpayer it may mean that his taxes are less this year.”

The big drop in the county’s valuation isn’t going to break the bank — the $57.7 million decline equates to $577,000 in taxes, of which the county gets 26 percent. But, Caetano pointed out, in today’s budget climate, in which the county has had to cut $16 million out of its budget, every tax dollar counts.

The more significant issue is the decrease in valuation itself, something Caetano never thought he’d see in his lifetime. But when housing went south, he said he knew what was coming.

“The closest we came to being negative was in 1996 (.6 percent valuation growth),” Caetano said. “Since that point, we haven’t looked back. Maybe it’s human nature — you don’t anticipate that things are going to get much worse so quickly.”   

For years, the county’s valuation growth went on unabated. From the bursting of the dot-com bubble until 2006, the peak of the housing boom, the county’s rate of year-to-year valuation growth steadily rose from 4.4 percent a year to 11.2 percent. In 2007 and 2008, the rate of growth steadily declined, from 8.2 percent to 5.9 percent. Then, the losses came.

“This is definitely uncharted territory,” Caetano said. “A lot of assessors throughout the state are seeing negative numbers.”

And many of them, largely in the Central Valley, are seeing worse numbers than Caetano.

He noted that, unlike slower-growing Tuolumne County, the growth in the Valley has been rapid, with many large subdivisions built there during the boom. In today’s market, it is apparent they were overvalued, Caetano said, and local governments there are taking big hits as a result.
 

“We didn’t experience the great growth then, so we’re not experiencing that level of decline now,” Caetano said.