Softening values spark property tax reassessments.

Tax rolls highlight where 1992 real estate action was

The dominant trends in Los Angeles County property this past fiscal year were sluggish sales, stalled home construction, declining value of homes and businesses and declining value of businesses' personal property, according to Los Angeles County's 1992 tax roll.

The 88 cities in L.A. County are extremely varied, from the likes of industrial cities like Vernon, to middle-class residential cities like Hawthorne, to gate-guarded luxury home enclaves like Hidden Hills.

A report by the Los Angeles County Assessor's Office, published this summer, highlights activities that triggered reassessments during the 1992 assessment year. While no hard-and-fast conclusions can be drawn, the report provides a road map to where the action was.

The City of El Segundo, for instance, saw its aggregate assessed property value rise only 0.55 percent during the fiscal year ended Feb. 28, 1992, compared to the prior fiscal year. The county's overall assessed property value, by comparison, rose 6.1 percent during that time. According to the report, the tiny growth was owing to value declines among office buildings, and an overall downward reassessment on personal property and fixtures in the depressed aerospace industry.

According to the report, incorporated residential communities, especially the higher-priced ones like Bradbury and Hidden Hills, led the county in overall appreciation last year.

The value of land in Bradbury climbed 11.3 percent on the county assessor's tax roll, higher than any other city during the 1992 assessment year. That was likely a statistical fluke, said appraisal sources. Because the small city contains just 382 homes, its overall assessed value can be noticeably impacted by the sale of just a few expensive homes. (Bradbury is located in the San Gabriel Valley, about five miles east of Pasadena.)

Hidden Hills is another tiny city that saw its assessed value rise more than most cities in L.A. County during fiscal 1992. Specifically, the assessed value of that two-square-mile city, which abuts the Ventura Freeway in the county's northwest corner, climbed by 8.15 percent. That increase compares with a 6.1 percent rise in the assessed value of Los Angeles County as a whole.

Property in Hidden Hills changed hands at a "dramatic" rate, despite the recession, according to the assessor's report. "Due to the location and desirability of this upscale neighborhood, new construction continues to be strong," noted the report.

The 1992 assessment year ended Feb. 28. That may seem like ancient history, yet the trends continue. The dominant trend -- price deflation -- had not yet reversed by summertime, said Ned Dougherty, supervisor of research and development for the Assessor's Office. He added that no other major trend has so far emerged from the freshest assessment data available. "Nothing dramatic has happened," he concluded.

Some cities seemed to defy the recession. San Marino's valuation, for example, climbed 7.9 percent. This was above average because of "high demand for luxury housing in this affluent area, unaffected by the recession," said the report. Remodeling and additions to single-family homes also continued at a strong pace.

Top and bottom value-gainers of 1992
City                                   Assessed value change
Top five cities
Bradbury                                     +11.28%
Bell Gardens                                 +10.76
Avalon                                       +10.25
Pasadena                                     +10.17
La Canada Flintridge                         +10.00
Bottom five cities
Carson                                        -1.15%
Irwindale                                     -0.63
El Segundo                                    +0.55
Signal Hill                                   +1.55
Westlake Village                              +1.97

Adding a bathroom, a pool or second story also boosted assessed property values in more middle-class areas, like San Dimas, which experienced an 8.32 percent rise in assessed property values.

"A lot of people couldn't afford to move or didn't move in 1992, so they built on," explained one assistant county appraiser who asked not to be named.

Assessed valuation for a city is typically boosted by new construction and the 2-percent maximum inflation adjustment. So do sales, because title transfers force property to be reassessed at current market value, typically upwards, under provisions of Proposition 13.

A notable exception in 1992 was a minority of properties bought since the late 1980s that have declined in value. Countywide, new homes bought in new tracts during the peak years of 1989-1990 typically have fallen the steepest, said another county appraisal official. He estimated the decline at 15 to 20 percent.

Anecdotal evidence suggests 25 percent or more is common, however, especially for expensive homes. This evidence defies the county figures, which show the average home value declined to $236,900 in the 1992 assessment year from $240,500 in 1991.

Several sources said the higher-end's troubles were counterbalanced by the cheaper homes' resilience.

"We're back down to 1986 prices for big houses, down about 20 percent," said Stephen Shapiro, partner at Stan Herman & Associates, a Beverly Hills brokerage specializing in the upper end. But since spring of 1992, the $400,000-$500,000 homes -- "entry-level" for his clientele -- are coming down too, he said.

Looking at the 1992 fiscal year, Dougherty said one countywide trend was homeowner-initiated reappraisals. The 28,378 homes that were reappraised, based on the suspicion they had lost value, were spread rather evenly across the county, he said. These so-called Proposition 8 reappraisals, named after the 1978 state initiative that authorized them, resulted in 16,818 downward valuations. The average home's value declined by $53,000, saving each home owner roughly $530 in annual property taxes. In addition, 130 major commercial properties were reappraised downwards, cutting an average of $3,660 from each commercial property owners' annual tax bill.

Other highlights noted by the Assessor's Office:

La Canada Flintridge's aggregate assessed property value rose 10 percent due to an increase in title transfers and luxury-home building.

Irwindale's aggregate value sank 0.6 percent, due to a slight decline in the value of personal property and fixtures.

El Monte's value rose 8.2 percent, due to a higher-than-average volume of commercial construction, including warehouses and auto dealerships.

The values of Maywood and La Puente rose 9.1 percent and 8.1 percent, respectively. Credited for La Puente's rise was strong demand for low-price housing.

While anecdotal evidence indicated Maywood also enjoyed strong demand for its low-price housing, the assessor's report merely cited Maywood's redevelopment activities as contributing to the city's above-average value growth.

In one example of that redevelopment activity, Maywood sold a 3.75-acre piece of city-owned land for $2.2 million to a developer for construction of a new neighborhood shopping center. That sale put the land back on the tax roll. The new Maywood Village Square shopping center has an assessed value of $7 million.

The average sales price for a home in Maywood was $168,000 in September 1992, said Century 21 Casablanca Manager Santo Lozoya. That is barely down from $169,000 from one year ago, he said. "Sellers in Maywood are more realistic on their prices," said Lozoya, "so there's more movement."

Dougherty of the assessor's office was quick to point out that isolating which factors were the strongest determinants of property value rises or falls would require far more computer analysis by his office. For instance, his staff noted a 10.2 increase in Pasadena's assessed property value. Major factors cited by the Assessor's Office as contributing to Pasadena's rise included completion of major commercial projects in the gentrified "Old Town" district, plus increased new construction activity for high-density housing projects. Dougherty did not specify which factor contributed more to overall growth.