Property Values Hit Pre-Recession Level.

The total assessed value of real estate in L.A. County rose by 6.7 percent last year, according to a report to be released this week -- meaning local real estate values have finally recovered all of the ground lost in the recession and surpassed their 1991 peak.

Much of the fastest growth in property values last year occurred in gritty industrial communities like El Segundo, Carson and Santa Fe Springs, driven in large part by high demand for industrial space and modernization of oil refineries.

In addition, L.A. County Assessor Rick Auerbach's report shows that the average market value of single-family homes in L.A. County that changed hands last ear rose 7.1 percent to $245,000, surpassing the 1991 peak value of $238,000.

The total assessed value of commercial, industrial and residential properties in L.A. County rose last year by $36 billion to a record $569 billion. That outpaces the 6 percent growth in total assessed valuation in 1998.

"We have a strong economy, with high consumer confidence and low unemployment," Auerbach said. "Real estate is one of the key factors in this economic growth."

This is welcome news for local government coffers, which have only recently recovered from the devastating property value declines of the early 1990s. (Under Proposition 13, annual property tax payments to local governments are equal to 1 percent of a property's total assessed valuation.)

What's more, Auerbach said he expects this upward trend to continue through the rest of this year.

"I expect next year's assessment roll to show a very similar increase in the 6 percent to 7 percent range," he said. "We're not seeing any letup in property transfers, and the overall economy remains in good shape."

One of the more surprising results from this year's assessment report is the double-digit jumps in assessed valuations in highly industrialized cities. El Segundo posted a whopping 13.1 percent increase in assessed valuation last year to $6.5 billion, while Carson saw an 11.5 percent increase to $8.8 billion.

Not far behind was Santa Fe Springs, which posted a 9 percent increase in assessed valuation, to $3.4 billion. (By comparison, the city of L.A. saw a 6.9 percent increase to $217 billion.)

"These are primarily industrial areas and there is now a greater demand for industrial and office space," Auerbach said. "We've seen substantial increases in transfers of ownership in the industrial warehouse sector. And those areas have a substantial amount of industrial and warehouse properties that were reassessed downward in the recession and restored to their pre-recession values last year."

In addition, El Segundo and Carson saw huge increases in the values of oil refineries, driven by renovations. Chevron Corp.'s refinery is in El Segundo and the former Atlantic Richfield Co. (now BP Amoco) refinery is in Carson.

Significant gains in assessed valuation were also seen in South Bay coastal cities such as Redondo Beach (10.9 percent), Rolling Hills Estates (10.1 percent), Manhattan Beach (9.8 percent) and Hermosa Beach (8.9 percent).

Auerbach said these beach communities continue to he very desirable, resulting in considerable new construction of high-end homes and condos and significant increases in the resale values of existing residences.

Desirable location was also a key factor in the resurgence of West Hollywood, which saw its assessed valuation jump 9 percent last year. And that was at the outset of the massive, two-year reconstruction of Santa Monica Boulevard. When that project is completed next year, it should boost commercial property values in West Hollywood even more.

While many areas of the county are experiencing robust growth in assessed valuations, other cities, particularly in the northern and eastern reaches of the county, have been fairly stagnant. San Gabriel Valley cities like Covina and South El Monte, for example, posted gains in the 2 percent range.

"The demand simply hasn't been there in these areas," Auerbach said. "In fact, many of these cities still remain below their pre-recession peaks for total assessed valuation."

But, for the first time in nearly 10 years, not a single city saw its total assessed property values decline. In fact, only three cities posted gains of less than 2 percent: Cudahy (1.1 percent), Covina (1.6 percent), and Artesia (1.9 percent).