Though Gilroy
’s real estate market is the hottest in the county, Morgan Hill
property owners have plenty of reasons to celebrate. The assessed
value of all residential property in the city grew to $4.9 billion
over the last year, a 13.62 percent leap that paced 7.99 percent
growth in the overall tax roll growt
h for the county.
Though Gilroy’s real estate market is the hottest in the county, Morgan Hill property owners have plenty of reasons to celebrate.
The assessed value of all residential property in the city grew to $4.9 billion over the last year, a 13.62 percent leap that paced 7.99 percent growth in the overall tax roll growth for the county. Morgan Hill wasn’t far behind. The value of residential property here jumped 11.39 percent, to $2.9 billion.
“To me that proves how desirable South County is to people looking for an alternative to the prices in San Jose,” said Patty Filice, a broker associate with Intero Real Estate Services in Morgan Hill. “It proves what a great investment the South County area is.”
Santa Clara County Assessor Larry Stone confirmed that the surge in the tax roll is driven by the residential market and cautioned that a bursting of the real estate bubble could lead to a significant downturn in the tax roll.
“The good news is that it’s up 13.5 percent in Gilroy, and 8 percent in the county, but the concern that should be shared by all is that it’s driven by one white-hot segment of the market,” Stone said. “Commercial and industrial property is still flat. The governments that spend the money generated by the assessments should be cautious.”
In the meantime, the increased home values and business property is a boon to the city government, though not enough to dig Morgan Hill out of its $1.2 million deficit.
The assessed value of property county-wide grew to $240 billion. Last year it was about $222 billion. The roll growth of 7.99 percent is more than the growth of the previous two years combined, Stone said.
“Silicon Valley’s resiliency and speed of recovery is quite remarkable,” he said. “The worst appears to be over for commercial an industrial property owners, with a level of market stabilization not seen in several years.”
Last year, the assessed value of commercial and industrial property dipped by 40 percent. This year, it fell by just 10 percent. Last year, more than 23,000 residences were devalued, compared to 3,000 this year.
Stone said business property continues to lose value because companies aren’t adding jobs or investing in computer systems and office infrastructure.
“That’s the volatile part, and Santa Clara County has a higher percentage of the roll in business personal property than any other county, because we’re Silicon Valley,” he said. “Everything happens in Silicon Valley first and fastest, up and down, or good and bad.”
In 2000, the county accounted for 25 percent of the state’s roll growth. By Last year, the economy had soured so much it ranked 57th of 58 counties.
Total assessment of area property (in billions)
2005 2004 Change
• Morgan Hill $2.391 $2.198 10.14
• Gilroy $5.162 $4.547 13.53
• county-wide $240.142 $222.376 7.99
