Property Value in LA County Expected to Break $2 Trillion This Year
By Nick Trombola May 16, 2024 1:30 pm
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Housing prices in Southern California might be out of control, but at least Los Angeles County is making money.
Taxable property values in the county are expected to rise by 4.75 percent in 2024 compared to last year, which would surpass $2 trillion in net total value for the first time, according to L.A. County Assessor Jeff Prang, who released a property forecast to the county’s Board of Supervisors on Wednesday.
The forecast projects the expected growth rate for the county’s annual assessment roll, an inventory for all taxable property. Local governments use the forecast as a basis for their budget proposals.
“It has been a challenging few years as the local and national economies respond to a variety of factors, whether it be residential or commercial,” Prang said in a statement. “Our analysis indicates that property values are going to grow for the 14th consecutive year, which is good news for property owners and for local governments because they rely on property taxes to pay for vital public services. However, sales volume declined significantly in 2023 and commercial properties, especially Downtown Los Angeles, have actually experienced huge declines in value.“
While average apartment rents are at all-time highs in L.A. County, multifamily real estate — along with most other asset classes — has continued to see significantly fewer trades after the first quarter this year amid higher interest rates and inflation. And in the city of L.A., an additional transfer tax via Measure ULA has further dissuaded investment activity.
On the single-family side, home median prices remained at an all-time high, with the average home valued at about $900,000, per Prang’s report. Property sales are expected to be the largest contributors of assessment roll revenue with more than $51 billion.
Prang also expects an increase of $6 billion in new construction revenue this year, with major projects such as Intuit Dome, the new home of the L.A. Clippers, providing “significant value.” The forecast also notes a healthy chunk of value in special use property types, such as $400 million for major construction projects like SoFi Stadium and YouTube Theater.
Though decline-in-value reductions will take away some $2 billion from the assessment roll this time around, per the forecast.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
