The Santa Clara County Assessors Office released findings July 1 which stated that the total net value of all real and business property in San Jose had grown just 4.64-percent since last year, the second-worst of any incorporated city in the county. The figure did not include property designated as part of the San Jose Redevelopment Agency, which is calculated separately and experienced a 8.1-percent increase. The total value of San Jose property jumped from $96.6 billion in 2007 to $100.9 billion in 2008. The value of RDA property puts the total San Jose value at more than $124.8 billion.
The county as a whole grew by $19 billion to a total of $303 billion. The raise in value, however, marked a third consecutive year of declining growth rates, from 9.6-percent in 2006, to 8.7-percent in 2007 and 7-percent this year. The study assessed the value of all land, physical buildings, residences and structures - called "secured" properties - and business property such as machinery, equipment and fixtures - called "unsecured" property - based on assessed value on Jan. 1, 2008.
Only Milpitas (4.18-percent) and the unincorporated portions of the County (4.03-percent) had a slower rate than San Jose. Unincorporated segments of the
Despite the disappointing numbers for both San Jose and the county, the decline in the growth rate was more gradual than those experienced by most counties in the state, thanks in part to Silicon Valley's strong technology sector, according to county assessor Lawrence Stone. "We don't have a terribly diversified economy, but it is diverse in the balance between commercial industrial properties and residential properties," Stone said. "At the beginning of the decade, the commercial side carried the roll growth. After the 'dot-com' bust, residential property boosted the roll growth. Now that the residential market is in turmoil, the industrial sector is carrying things again."
Though Santa Clara County has remained insulated from much of the national fallout in housing, growth in the assessed value of county residential property has dropped to 5.5 percent.
The Assessor's Office has taken what it called a "proactive" approach to the decline in the housing market by voluntarily reducing the assessed value of 41,866 properties for a total reduction of more than $5 billion in value. San Jose was the hardest hit, with 25,467 properties reduced in value - 61-percent of all impacted property in the county. The San Jose reductions totalled $2.56 billion.
Stone said reducing the assessed property values protects homeowners whose property value has dropped below their purchase price, and provides a more accurate assessment of county growth and value. He added that when the real estate market rebounds, the assessor will "restore" the assessed value to what it would have been without the temporary reductions.
In contrast to the residential sector, Stone said the growth of the assessed values of commercial and industrial properties remained strong, and he was optimistic about prospects of improved market in the near future. He pointed to a period during the early- and mid-1990s when the local housing market suffered a severe slump, before experiencing rapid growth in following years. "Historically, even during a decline, the real estate market always tends to rebound."
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