On the heels of last year's first solid increase in property values since 2008, Santa Clara County's assessor on Thursday reported even better news: Assessed values grew by nearly $26 billion over the previous year, the second-highest dollar increase in county history.
The total net assessed value of all residential and commercial property grew 8.35 percent to a record $334.6 billion, up from $308.8 billion in 2012.
Assessor Larry Stone attributed the surge to Silicon Valley's strong economy, declining unemployment, dramatic reduction in office and apartment vacancies, a robust stock market and housing values commanding multiple offers and sales above the asking price.
Increased property taxes are especially good news for schools and local governments, which depend on the taxes for a large portion of their funding.
Stone said his office knew "everything was going up, but we didn't think it would be this great.''
He said he was surprised by a few things: The $26 billion was twice what his office had projected; the recovery is balanced across the county; and the percentage increase in the value of condos and townhomes -- hit hardest during the recent recession -- is greater than single-family homes in most areas.
As the latest figures signal a real estate rebound, nearly a quarter of the county's homeowners will see steep property tax increases this year, Stone said.
That's because recent gains in the market value of homes that sank below their purchase price during the recent recession resulted in temporarily lower taxes, per California's Proposition 8, passed in 1978.
Last year, 136,000 of the county's 478,000 properties were worth less than what their owners paid for them. This year, Stone said, 47,000 have completely recovered their lost value. Another 81,000 have recovered some but not all of their original purchase prices based on market values as of Jan. 1. As a result, some of those 128,000 properties will see double-digit increases in assessed value, he said.
Stone noted that all 15 cities in the county recorded increased assessed value growth above 6 percent, "which suggests a more solid recovery," with Campbell and Cupertino topping the list, growing 11.6 percent and 10.8 percent, respectively, since last year.
Stone also noted the gains in East San Jose, Milpitas, Morgan Hill and Gilroy, which had witnessed the greatest drops in market value in recent years.
Among the factors contributing to the increases, Stone pointed to rents for apartments in the county that over the past two years have jumped as much as 30 percent, and 8,000 new apartment units are under construction or recently completed in San Jose alone, with an additional 5,000 units in the South Bay.
Similarly, Stone said, Class A office and rents for research and development buildings have increased nearly 20 percent. The value of business personal property, including machinery and equipment, rose 6.38 percent to $33.6 billion, the second largest amount in the state, he said.
Meanwhile, sales of residential homes, both single-family and condominiums, are approaching pre-recession levels.
Stone said his office over the next week will mail property owners their assessment notices, which serve as the basis for property tax bills mailed in the fall.
But the issue of restoring some assessed values as others are reduced can confuse property owners, he said.
Most property owners assume that Proposition 13 limits increases in the assessed value of a property to no more than 2 percent annually. But that's not entirely true, Stone said. If a property was reduced by Proposition 8, which passed in 1978 and allows for the reassessment of property values in a declining market, the assessment goes back up to the Proposition 13 cap when the real estate market recovers, even if that's more than 2 percent.
Homeowners who want to contest their properties' assessed values can request a review from the assessor by Aug. 1 or file a formal appeal with the county by Sept. 16. They also can go to www.sccassessor.org to look at their property's appraisal and also request a review online if needed.
Contact Tracy Seipel at 408 275-0140.
The Santa Clara County's assessor on Thursday released the latest property value estimates, marking the second-highest dollar increase in county history.
Campbell: $7.2 billion, up 11.63 percent from previous year
Cupertino: $16.2 billion, up 10.84 percent
Gilroy: $6.1 billion, up 7.69 percent
Los Altos: $11.1 billion, up 9.39 percent
Los Altos Hills: $5.8 billion, up 9.79 percent
Los Gatos: $9.4 billion, up 9.06 percent
Milpitas: $12.8 billion, up 7.67 percent
Monte Sereno: $1.6 billion, up 6.66 percent
Morgan Hill: $6.5 billion, up 6.40 percent
Mountain View: $18.7 billion, up 8.16 percent
Palo Alto: $25.5 billion, up 7.76 percent
San Jose: $131.9 billion, up 8.72 percent
Santa Clara: $27 billion, up 6.79 percent
Saratoga: $11.5 billion, up 8.03 percent
Sunnyvale: $29.2 billion, up 8.75 percent
Unincorporated county: $13.4 billion, up 4.33 percent
Source: Santa Clara County Assessor's Office