Palmdale Leads County as Value Of Homes Soars By SHELLY GARCIA Senior Reporter It’s no secret that property values have been rising exponentially, what with the low supply of housing and the increasing demand. But now a just-released report has pinpointed just which communities have reaped the greatest benefit of those dynamics, and the results are far more surprising. Palmdale has ranked number one as the city registering the largest percentage increase in assessed property value, according to the 2003 property assessment roll for Los Angeles County. Property values in Palmdale increased by 11.4 percent in 2003 to $6.3 billion. Only Asuza and Malibu came close to matching Palmdale’s growth, registering increases of 10.6 percent and 10.3 percent respectively. “This increase is more attributable to a more affordable housing community,” said Gil Parisi, director of administrative and roll services in the office of the Los Angeles County Assessor. For years, one of Palmdale’s only distinctions was its low-priced homes, far under the market price of single-family units in most other L.A. County neighborhoods and well under the median price of a home in the San Fernando Valley. Now it appears that Palmdale’s home pricing is paying off, and Palmdale is getting a larger share of homebuyers. Chief among the factors that affect property values is changes in ownership, which trigger a reassessment for tax purposes. As the housing market heated up and supply dwindled in many other areas of the county, Palmdale picked up the slack. “It relates to two issues,” said David Myers, president of the Greater Antelope Valley Economic Alliance. “The shortage of housing and more specifically the shortage of housing people can afford.” Between 2000 and 2002, the county added 305,000 new residents and only 35,000 housing units, according to the Los Angeles Economic Development Corporation. But, Myers said, Palmdale’s population over the same period grew by 10,600 people and the city added 1,924 new housing units, according to data compiled from the U.S. Census and the State Department of Finance. That’s about one housing unit for every five people compared to one unit for every 10 people in the county overall. Couple that with the relative price of housing in Palmdale, and “essentially they’re selling houses up here as fast as they can build them,” Myers said. The median home price in Palmdale at the end of the first quarter of 2003 was $171,250, less than half the median home price in the San Fernando Valley. Another factor contributing to the increase in sales and therefore property values in Palmdale is the growing move-up market, Myers said. Although there is no data available to quantify its effect, Myers believes that many people held off selling their entry level homes during the 1990s and early 2000s because prices in the marketplace hadn’t risen enough to allow them to trade up to a more expensive home. But over the last couple of years, as all home prices have increased, these owners have used the profit on the sale of their homes to buy more expensive units. “People in the 1990s, who owed more than they could sell their homes for, they had jobs and increases and growth, and all of a sudden they could sell their houses and make a profit on it and that’s what happened,” Myers said. More than half, or $344 million of the $649 million increase in property values in Palmdale is attributable to changes in existing home ownership, Parisi said. The rest was due to new construction, which accounted for $70 million and inflation, which accounted for $114 million of the increase. Property assessments also allow for adjustments based on changes in market value, and the assessors, who lowered property values in Antelope Valley through most of the 1990s, when the area was steeped in a severe recession and many homes had gone into foreclosure, this year restored some of those values upward, accounting for another $138 million of the difference. While Palmdale’s growth beat all other cities in the county, its sister city Lancaster, was not far behind. Property assessments in Lancaster rose 9.8 percent to $5.5 billion, the report revealed. Other cities in the greater San Fernando Valley region, also experienced increases in assessed values, although not to the same degree as Antelope Valley. Agoura Hills registered a change of 5.8 percent to $2.9 billion. Burbank’s assessed values rose 5.4 percent to $12.2 billion. Calabasas saw a 4.6 percent increase to just over $4.0 billion. Glendale property assessments increased 7.9 percent to $15.5 billion. San Fernando’s assessed values rose 7.6 percent to just over $1.0 billion; and in Westlake Village the increase was 4.4 percent to $1.9 billion. The city of Los Angeles registered a 7.7 percent increase to almost $266 billion.