TAX NEWS - June 2010

California Tax: Stanislaus County home prices rise at last

Finally some good real estate news: Stanislaus County median home sales prices jumped $13,000 in May, rising to $148,000.

That's the first significant increase since 2005, when the housing market collapse began. For most of the past 18 months, Stanislaus' median price has bounced between $133,000 and $140,000, according to statistics gathered by MDA DataQuick.

May's sales statistics, released Thursday, show Stanislaus finally joining the rest of California in recovering from the real estate crisis. Home prices in most of the state began pulling out of the slump months ago, while Stanislaus' prices stayed stuck near the bottom.

Home values have been so low that the county's property tax assessments are dropping for the third consecutive year.

Stanislaus County Assessor Doug Harms revealed Thursday that he is lowering property assessments another $1.7 billion — that's 4.67 percent.

Stanislaus' 2010-11 property assessment roll will be valued at less than $35.2 billion, down from $36.9 billion last year, $40 billion in 2008 and $42.9 billion in 2007.

"Values did not drop as dramatically as they have in the past couple of years, but the declines were broader and impacted all types of property, not just residential," Harms said. He said he expects more detailed assessment statistics will be available Monday.

Assessment declines are key because they mean landowners will owe less property tax this year. That's good for homeowners but bad for government, since lower taxes mean lower revenues for public agencies.

Property assessments are based on what homes were believed to be worth on Jan. 1, 2010.

DataQuick statistics show homes have gained value since then, or at least they did in May. Home sales that month, however, might have gotten a boost from federal and state home buyer tax credit programs.

Some first-time buyers purchasing in May were eligible to get as much as $8,000 in federal tax credits and $10,000 in California tax credits. The federal credit ends this month, and just about all the money for the state's first-time buyers' program is gone.

That may make it tougher to maintain momentum in the real estate market.

But one tax incentive program continues to have lots of money. California's $100 million New Home Credit Program will provide as much as $10,000 in tax credits to those who buy new homes between May 1, 2010, and Aug. 1, 2011.

Stanislaus' builders can use all the help they can get selling homes. This April builders sold only 10 new homes, which was just about a record low.

During the 2005 building boom, by contrast, hundreds of homes were sold per month, and most of them went for more than $400,000. Stanislaus' median new home price in April was just $197,400, according to the California Building Industry Association.


On the Net:

For more information about California tax credits, go to www.ftb.ca.gov and select "Tax Credits for New Home Purchase/First-Time Buyer."