Great news: Stanislaus County home values have increased so much that property assessments are jumping nearly 5 percent, boosting the county roll by more than $1.6 billion.
Now here's the catch: Property taxes will go up accordingly.
After five years of declining assessments, Stanislaus County Assessor Dave Cogdill announced Thursday that the tide has turned. His staff calculates the total assessed value of property in the county is $35,134,919,019.
That's still nearly $8 billion less than what the county's more than 178,000 parcels were worth in 2007. But that was before the real estate market crashed and the recession gripped the nation.
The upward swing means more tax revenue for local governments, courtesy of homeowners paying more property taxes. The assessment will generate about $350 million in taxes, or about $16 million more than last year.
"That's good for county and city governments, schools and special districts," Cogdill said. The state government also will get an income boost. "For Stanislaus County's general fund it will mean about $4.5 million in additional revenue. The big question is: How will they spend it?"
Cogdill cautions against thinking this increase means good times have permanently returned to the real estate market.
Rising property values have been driven by abnormally low mortgage interest rates, Cogdill said. When the U.S. Federal Reserve stops artificially suppressing interest rates, he fears that could dampen the housing market.
Caution: Save, don't spend
Thursday's big drop in the Dow Jones average shows investors also worry about a weakening in the market.
"It's all about house payments and what loans buyers can qualify for," Cogdill said. If interest rates rise, he said, home prices may falter again.
Because of that, Cogdill hopes government agencies will use this year's revenue increase to build up their reserves rather than spend the extra cash.
Cogdill said he is not sure whether Stanislaus County home values will continue rising, but new commercial and industrial facilities, such as Blue Diamond Growers' processing plant in Turlock and Amazon's distribution center in Patterson, should give next year's assessment roll a boost. Property assessments this year rose 4.9 percent for the county overall, but some cities fared much better than others.
Leading the pack was Hughson, where assessments soared 10.8 percent, and Ceres, which increased 9.7 percent.
Lagging behind was Oakdale, up 2.5 percent, and Turlock, 4.5 percent. Unincorporated parts of the county (geographically, most of it) increased 3.1 percent.
Modesto, Newman, Patterson, Riverbank and Waterford all rose from 5.7 percent to 6.6 percent.
Individual homeowners might see much more significant increases in their assessments (and their taxes, too).
That's because of complex property assessment rules created in 1978 when California taxpayers revolted and voted for Proposition 13 and Proposition 8. Proposition 13 limits how much assessments can increase each year, and Proposition 8 requires assessments be lowered when values decline.
More than 59 percent of all Stanislaus properties have had their assessments lowered since the recession began. But those assessments can jump up quickly as the market shifts.
Assessment requirements for most of Stanislaus County's agricultural property is different, so its value swings are not as great. Ag land is valued for tax purposes in accordance with the California Land Conservation Act, known as the Williamson Act, which was established in 1968 in an effort to preserve farmland and open space.
Stanislaus property owners can see exactly how much their land and homes are assessed for by going to the assessor's website: http://qa.co.stanislaus.ca.us/AssessorWeb/public/ValueNotice-Search.jsp.
Taxpayers who have questions about the assessed value of their property are encouraged to contact the assessor's office at (209) 525-6461 or in person at 1010 10th St., second floor, Suite 2400, Modesto.
"Our goal is to provide the taxpayer courteous service and do our best to help them understand the complexities of the property tax process," Cogdill said.
Assessments may be appealed between July 2 and Nov. 30. Appeal forms are available from the clerk of the assessment appeals board at 1010 10th St., sixth floor, Suite 6700, Modesto, CA 95354 or at www.stancounty.com/board/aab.shtm.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or (209) 578-2196.