Here's why about 100,000 properties were reassessed
| Thursday, Aug 20 2009 06:06 PM
Last Updated Thursday, Aug 20 2009 06:08 PM
Homeowners, brace yourselves.
The Kern County Assessor Recorder's Office last week began mailing about 100,000 postcards informing homeowners their property taxes will change to reflect more current home values.
For most people, that little white postcard will be shocking.
Property tax bills for those homes fell an average of $470, reflecting an average loss in property value of $47,000 between January 2008 and January of this year, according to Assessor-Recorder James Fitch.
The taxable value of Kern County property overall is $79 billion for fiscal year 2009-2010, a decrease of $5.3 billion, or 6.4 percent, from the previous year.
That's a huge blow to county coffers. The reduction resulting from the reassessment represents about $4 billion, the county said.
Who it impacts
The top of the market was July 2006, and people who bought a house at that time have seen about a 50 percent drop in the value of their property, Fitch said, so it was only fair to update assessments for recent buyers.
"Anyone can call us any time and get their property reassessed if they don't believe their assessment is accurate, but we tried to be proactive and catch as many as we could," Fitch said.
He stressed that property owners should not pay private companies to initiate a review on their behalf. The county will do it for free.
This is the second time in a year that the county has conducted a broad examination of home prices in response to the soft real estate market.
In January 2008, the average tax bill fell $600.
Most of the homes reviewed this time around were purchased between 2002 and 2008.
How it's done
The county takes its base price from the actual sale price of the home the last time it changed hands, and adjusts up or down from there periodically by looking at the going price of comparable homes in the same neighborhood.
It's not an exact science, so don't get too upset -- or too relieved -- by the county's take on the value of your home, say local real estate agents.
"They're usually in the right ballpark, but I've seen them off by as much as $20,000 either way," said Adrian Diniz, an agent with Keller Williams Realty.
Another thing to keep in mind is the numbers on the county postcards are a snapshot of home prices as of January, a lifetime ago in a fluid real estate market influenced by many factors that are hard to predict.
Wave of foreclosures?
There have long been fears of another huge wave of foreclosures as some of the more exotic adjustable rate mortgages granted in the boom years reset. But so far, that wave hasn't materialized.
"What really drives the price is the market, supply and demand, which is always changing," said Nance Fillmore, an agent with Fillmore Realty and president of the Bakersfield Association of Realtors.
Supply is artificially low right now because banks are mostly hoarding their foreclosed properties, and state and federal governments have imposed moratoriums and regulations to slow the foreclosure process, Diniz said.
There were 730 foreclosures in Kern County in July, and 1,364 default notices were filed that month, according to the Assessor-Recorder's Office.
Diniz predicts another dip in home prices if lenders flood the market with foreclosed inventory all at once.
On the other hand, if lenders release foreclosures slowly, there are still deals out there, he said.
Where home prices stand
The median sale price for existing single-family homes in greater Bakersfield rose 3.9 percent to $135,000 from June to July, according to the Preliminary Crabtree Report, compiled by Gary Crabtree of Affiliated Appraisers.
That's down 29 percent from $190,000 in July of last year.
Earlier this month, First American CoreLogic released figures indicating that more than half of local mortgages are upside down.
In Bakersfield, 87,480 homes, or 55.78 percent of properties with a mortgage, had negative equity at the end of June. Negative equity means those who borrowed to buy the homes owe more than the properties are worth.
But if you aren't under water and have no plans to sell in the near term, count yourself lucky, said Mike Grigg of Elite Auctions, which auctions real estate.
"If you aren't moving any time soon, just sit tight and enjoy your lower tax bill," he said. "The market will come back."
