Property values in Santa Clara County are at an all-time high despite a sagging office market and slowing home sales.
The property tax roll in the Silicon Valley county—home to San Jose, the most populous city in the Bay Area–rose 6.7 percent this year to a record $661.2 billion as of Jan. 1, the San Jose Mercury News reported, citing the Assessor’s Office.
That’s a hike of nearly 7 percent from last year, when county properties had a combined assessed value of $619.95 billion.
“The leading contributors to the increase in property assessments are changes in ownership and new construction, which accounted for $21.5 billion and $6.8 billion, respectively,” the Assessor’s Office said in a statement.
Under the state’s Proposition 13, the assessed value of a property may increase no more than 2 percent a year unless it changes hands — meaning that sales and construction typically drive the largest tax roll increases.
East Bay and Peninsula assessment officials also reported steady gains in property values in Alameda, Contra Costa and San Mateo counties
The jump in values in Santa Clara County follows a rise of 4.6 percent in 2021, 6.9 percent in 2020 and 6.8 percent in 2019. The increases are vital to public agencies that depend on property tax revenues.
Despite the record, property markets are at risk, as high mortgage interest rates and inflation have reduced consumer buying power, according to Santa Clara County Assessor Larry Stone.
As a result, property values in some parts of the county have declined over the past year, and some owners may see their property taxes go down this year, a rarity after Proposition 13.
Both commercial properties and residential properties are affected. Google’s Downtown West transit village, the largest single development in San Jose history, has stalled.
“With residential sales volume down 20 percent and office vacancy increasing due in part to remote work, the volatile and unpredictable nature of Santa Clara County real estate causes us to question the future of property values,” Stone said.
— Dana Bartholomew
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