Despite pandemic, real estate prices in LA County rise for 11th year in a row
Los Angeles County’s 2021 assessment roll, which examines all taxable properties in the county as of Jan. 1, rose $ 62.9 billion to $ 1.76 trillion – the 11th increase consecutive annual.
“We were all a little pleasantly surprised to find out that the assessment role, despite the pandemic, would increase during a pandemic-induced recession,” LA County Assessor Jeff Prang said.
Real estate sales added $ 44.9 billion to the roll, while a consumer price index adjustment imposed by the Prop. 13 added $ 16.4 billion, and new construction added $ 8.8 billion.
The total assessment of the roll is $ 17 billion in property taxes. The money, Prang said, will be used for public education, first responders, public health and other services.
“This is a positive and forward move, which means local government and schools will experience growth in property tax revenues that will secure jobs and services and things people rely on during a pandemic,” said Prang.
However, not all measures have increased in the most recent period. There was a $ 5.5 billion reduction in personal business assets, a category that includes machinery, boats and aircraft.
“This is in large part because many restaurants paying property taxes on their kitchen equipment were exempt,” Prang said. “Since it was not in use, a reduction in the assessed value was granted to them.”
Prang said certain types of assets, like hospitality, suffered, while “residential properties have exploded.”
He said the assessed value of single-family homes has increased by an average of 22%.
UCLA Ziman center director Stuart Gabriel said he’s seen an increase in the desire for housing, especially in suburban areas.
“With the pandemic and the post-pandemic, there has been a remarkable shift in what we call location preferences within the metropolitan or intra-metropolitan area,” he said. “A rough way to characterize this is that the suburbs were in disgrace before the pandemic and became in favor after the pandemic.”
“We have seen a very significant upward movement in demand,” he added.
John Loper, associate professor at USC’s Price School of Public Policy, said this trend is also confirmed among tenants.
“If you look at the rents, suburban areas are doing much better in rental markets than urban areas,” he said.
Loper added that during the Covid-19 pandemic, more millennials also decided to buy homes.
Besides residential, Prang said, industrial assets also performed well.
“Another area that benefited was the warehouse, industrial space with many companies moving to telecommuting and mail-based operation, they needed warehouse space to handle shipping of goods.” , did he declare.
Meanwhile, the value of refineries declined as fewer people were driving.
Prang said that so far this year things have remained “relatively stable” when it comes to home sales, but there is still some uncertainty on the business side, especially with the new delta variant of the coronavirus.
“We’re going to need a little more time before we can predict what will happen next year,” said Prang. “While things seem to be moving in a relatively bullish direction at this point, there is so much uncertainty and the residential market is overheating. “
However, he expects an increase in the number of commercial companies filing claims for write-downs.
Prang is also proactively reviewing properties like hotels to see if their value has fallen and will consider offering tax relief if so.
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