CA 2 articles

Ventura County Star

Property owners who think their tax assessments should be reduced amid falling real estate prices should wait before hiring a company to help them win a reduction, Ventura County Assessor Dan Goodwin said Friday.

That's because their homes may be among 8,622 whose assessed value has been cut under a program that Goodwin's staff launched this year in response to the real estate downturn.

The reductions which will save affected homeowners an average of $500 each on their next property tax bills are scheduled to be mailed in mid-July.

Homeowners should wait until then, Goodwin said, before responding to mailed sales pitches from at least two companies saying that, for a fee, they can help get assessments reduced.

Property taxes are computed based on what the Assessor's Office says a property is worth. Goodwin said his office's program is a proactive attempt to react to the market slowdown and be fair.

The reductions will lop off about $400 million in valuation from the county's assessment roll, which is to be announced in early July, Goodwin said. Since 1998, total assessments have increased nearly 100 percent, from $47.9 billion in 1998 to $95.8 billion last year. Goodwin noted that the value of many homes has increased much more than 100 percent over that period.

"What this is really about is the good government thing of giving people a fair tax bill, not one that is excessive," Goodwin said. "The other big issue is I didn't want to wait for thousands of people to have to call me and say, Didn't you notice? The market went down.'"

12,000 letters sent

Robert Jones, managing director of Escondido-based Property Tax Appeal Services LLC, which pitched its program recently in letters sent to 12,000 homeowners in Ventura, Los Angeles, Orange, San Diego, San Bernardino and Riverside counties, said he has already won assessment reductions for some of his customers, ranging from 6 percent to 18 percent.

His company, which charges a $100 retainer and 25 percent of any savings it obtains for a taxpayer, uses a statewide real estate records database and many of the same comparable sales criteria appraisers use to determine a home's value.

"Our point is to prove that the value has in fact fallen from when that person bought the house," Jones said. "The assessor's job is to prove that it hasn't lost value since it was bought."

The Assessor's Office tracks the value of some 300,000 properties in Ventura County, including about 150,000 condominium and single-family-home residences. The others are mobile homes, farms, commercial-industrial properties, boats, airplanes and business inventories and equipment.

In a typical year, Goodwin said, his staff reassesses about 30,000 properties, primarily those that have changed hands or undergone construction, ranging from room additions and remodeling projects to new buildings.

Price peak, then slide

This year, the office looked at about 18,000 additional residences, mostly those that changed hands from July 2005 to the end of last year, the period when prices peaked and then began sliding.

"Those properties generally fall into the range of ones that might have an assessment posted that would be over their market value," said Goodwin. "We broke that down by areas of the county because some areas were stronger than others because of scarcity and other issues. Typically, condos were disproportionately high in terms of properties that had declined in value."

The median price for new and existing homes and condominiums during that 18-month window started at $579,000, peaked at $634,000 and ended at $593,000, according to DataQuick Information Systems. The La Jolla-based marketing firm reported this week that the median for May was $590,000, a 1.6 percent decline from the same month last year.

Commercial and industrial properties were not studied because their values mostly have not declined, Goodwin said. Neither were residences purchased for below-market prices in subsidized housing programs.

His staff did full appraisals on 15,225 properties, including about 5,200 condominiums, 10,450 subdivision homes and 2,400 custom homes, Goodwin said. The values are as of Jan. 1, under law the assessment date for all properties for the 2007-08 year.

Other assessment options

Goodwin said appraisers also considered reducing assessments for all properties by a percentage equalling the overall decline in real estate prices, but that would have resulted in over-assessing some properties and under-assessing others.

Other counties are handling the problem that way, he said.

Goodwin said he has seen mailed pitches urging property owners to pay for help to get lower assessments from two companies, but he could only identify Property Tax Appeal Services. He emphasized that the mailers are not illegal.

Voters approved a law in 1979 allowing a property owner to file a form asking for a one-year lower assessment rather than filing a formal appeal. Homeowners who want to appeal for a lower assessment have until November.

Property Tax Appeal Services sometimes cannot come up with evidence that a reduction is needed, said Jones, the managing director.

"Some places don't even go down in value," he said. "If you own a home on a bluff in La Jolla, it hasn't gone down in value. They always seem to go up there."

His company will seek reductions only for properties purchased at the peak of the real estate boom. While most homes purchased earlier have probably lost some value, Jones said, they are almost certainly still worth more then when they were acquired.


Orange County


The woes of the national housing market continue to impact Irvine-based Standard Pacific Corp., whose stock hit a nearly four-year low this month.

Adding insult to injury, a drop in 2006 revenue amid the housing slump got Standard Pacific booted from this year’s Fortune 500.

A year ago, Standard Pacific marked its first inclusion in the Fortune 500, coming in at No. 493. That followed a tripling of revenue during the prior five years.

This year, Standard Pacific—the country’s 11th largest homebuilder—missed the cut for the prestigious list, coming in at No. 533 on the broader Fortune 1000.

The company’s decline has been dramatic, if not unexpected. Standard Pacific has spent much of the year getting rid of land, cutting building costs, offering incentives to buyers and dealing with slow sales in key markets such as California, Texas and Florida.

In the first quarter, the company took charges of $130 million to reflect land values that aren’t what they used to be, with $52 million of the charges related to holdings in California.

Standard Pacific’s stock—like that of most of its homebuilding peers—is reflecting the company’s slimmed-down operations.

Shares last week were off nearly 40% since February and down 60% from the industry’s heyday in mid-2005. The company had a market value of about $1.3 billion last week.

The housing slowdown and Standard Pacific’s stock slide have some analysts questioning whether a private equity firm could emerge as a buyer.

While the company’s “aware that there is interest,” Chief Executive Stephen Scarborough said late last week that it hasn’t been in any talks.

“We like the path we’re on,” he said.

If a turnaround is expected in the near future, Standard Pacific’s figures aren’t showing it. Last week, the company reported worse than expected orders for new homes in April and May.

Orders Down

New home orders, where buyers enter a pact to buy a home before it’s finished, were down 16% from the year-ago period, due in large part to slumping business in Florida and Arizona.

In California, where the company started selling at a number of developments, orders were up more than 13% in April and May.

Despite “seeing some energy” in California, overall home orders in April and May were off nearly 20% from the company’s business plan, executives said.

Along with regions of Texas, Arizona and Florida, the company blames underperforming areas such as the Inland Empire for the difference between projections and reality.

“The degree to which the (Inland Empire) market is correcting is greater than we expected,” Scarborough said last week at a New York investor conference.

There’s also fallout from the subprime mortgage collapse, Scarborough said.

“Certainly the impact of the subprime tightening has impacted some of our more affordable markets,” including Tampa, Fla., Phoenix and San Antonio, Texas, he said.

There are some positive signs.

The company’s cancellation rate from buyers backing out of orders was 28% in April and May, down from 35% a year earlier.

In California, the cancellation rate was 29%, down from 42%.

The number of prospective buyers at projects across the country also is strong, up nearly 20% from a year earlier.

“Buyers are out there looking for a house,” Scarborough said. “They like what (they’re) seeing, but haven’t gotten comfortable with the pricing they’re seeing. We need to work harder to convert that traffic.”

The company is offering increased fees to brokers as one way to boost sales.

Standard Pacific has about 57,000 home lots for current and future projects. That’s down from about 74,000 at the end of 2005.

“We’ve walked away from several thousand lots over the last year or so,” said Andrew Parnes, the company’s chief financial officer.

The company’s employee count is down 15% from a year earlier. Like other builders, it’s asked subcontractors to lower prices to bring down construction costs.

In some cases, Standard Pacific has “de-spec’ed” its homes, cutting pricey features to make houses more affordable.

It also plans to build fewer houses on speculation at its developments. The typical Standard Pacific community has three homes built but not sold. The company would like to get that average down to two.

Standard Pacific counts operations in six of the top seven growing markets in the country, and in 16 of the top 25 markets.

“We’ve got a sound footprint” to grow, Scarborough said.

He cited the Chicago and Washington, D.C., regions as two new markets that might be of