Further Early Indications of Recovery (Via the San Francisco Bay Area)

After two years during which tax rolls in most of the nine Bay Area counties shrank, often by large margins, this year property tax rolls are fairly flat compared with last year, according to assessors, reports the San Francisco Chronicle.

Assessors are starting to restore assessed value to some properties whose tax bills were reduced during the downturn. Under California's Proposition 8, assessors must reduce a property's tax value when it drops below the market rate and then restore the value as the market improves.

"We're beginning to see signs, however meager, of improvement in the market," said Larry Stone, Santa Clara County assessor, according to SF. The county partially restored value to 45,000 properties, largely in more affluent areas, he said. Overall, Santa Clara's assessment roll was up 0.88 percent this year.

Silicon Valley is behind the end to the decline. More from SFC:

Santa Clara, whose county seat is San Jose, acts as a leading indicator of market trends, said Bill Rousseau, chief deputy assessor in Sonoma County. "It's usually a couple of years ahead of the Bay Area," he said. "In the 1990s, after the downturn, Santa Clara came back about two years before we did."...


Contra Costa's tax roll was almost flat after falling 3.39 percent last year and 7.6 percent the year before. About half of the properties - 180,000 - got their assessments reduced because they're worth less than their base year factored value (the sales price plus the annual inflation factor). While 2,000 properties saw some values restored, most were bumped up only marginally, said Gus Kramer, county assessor.

Compared with coastal areas with job centers, Contra Costa lags, he said.

"Santa Clara and San Francisco counties are both basically hubs of the high-tech industry," he said. "We don't have that here in Contra Costa. Unemployment is still extremely high in this county."

Bottom line: The early stages of a Fed manipulated boom are developing, but it is early stage. Particularly disconcerting about this manipulated boom is that producer prices are already climbing. With current Fed double-digit money printing, the recovery will accelerate, but so will the price inflation.