Skyrocketing Home Prices Catch the Attention of The Tax Assessor.

On the Rise.

The rapid rise in home prices in San Carlos has been a blessing for homeowners, especially those who have decided to sell their home this year.  Sellers are having an absolute blowout year in 2013 as they've taken advantage of sparse inventory, low interest rates, and insatiable demand for homes in San Carlos and other hot communities on the Peninsula.  

But even for those who are staying put and not selling, the recent surge in home values has proved to be welcome windfall as well.

For some homeowners, the rise in home value means that they now have enough equity in their home to refinance their mortgage to take advantage of these unprecedented low interest rates.  This is especially important for those homeowners who were under water, or even those had less than 20% equity in their property and were paying costly private mortgage insurance (PMI).   The sudden surge in equity unshackles them from costly monthly PMI payment, which effectively puts several hundred dollars back in their pocket every month.

Higher home values even helps those who plan to remodel their home in the near future, since many of those projects will be funded by home equity lines of credit (HELOCs).  The more the equity in a home, the more money homeowners can borrow.

But like with everything else in life, nothing comes for free.    And this is no different.

Check Your Mailbox.

If you think that San Carlos home buyers and seller are the only ones paying attention to the escalating home prices, think again.  As quite a few homeowners have found out the past couple of weeks, the San Mateo County Tax Assessor is also paying very close attention to San Carlos and other communities in San Mateo County, and they want their fair share of the growing pie.  A number of residents have received a notice from the Assessor that the assessed value of their home has increased, in some cases very significantly,  and that their upcoming property tax statement will reflect this increase.    One resident informed me that their assessed value increased by 24% in just one year!

In reality, this move by the Assessor's Office shouldn't be a total surprise to anyone.  It was only a few years ago that they proactively lowered the assessed value of over 40,000 in homes in San Mateo County after the market crash and recession of 2008.   They made it very clear then that they would reserve the right to reset values back up to pre-recession levels when the market deemed it was time.  And it looks like now is indeed that time for many homeowners.

What Can You Do?

If you have received one of these letters, and you feel that the assessed value of your home is too high, you can contest that valuation by simply going to the Assessor's website and filing a Decline in Value Request Form.   But if you're going to do this, make sure you do your homework and have valid comparable sales to prove your point.  Remember, they have access to the same data that you do, so you're not going to get far without some validity to your argument.

Your Realtor should be able to provide you with those comparable sales, or you can just shoot me an email and I'd be happy to do it for you, as I have already done for numerous homeowners.

Good luck!

-----------------------------------------------------

Chuck Gillooley is a long-time San Carlos resident, Realtor, and author of the popular White Oaks Blog.