Marin property assessed values grew slower than expected last fiscal year.
Marin County Assessor-Recorder and County Clerk Shelly Scott said the county ended the 2023-24 fiscal year at the end of June with a growth rate of 4.27%, down from 6.34% in the previous fiscal year.
Newly certified property assessments totaled $105.6 billion, an increase of $4.3 billion from the same period last year.
Josh Swedberg, the county's budget director, projected a 5% growth rate during a December county supervisors briefing, which is the county's historical average.
Assessment rolls are used to calculate the amount of property taxes paid by Marin residents. A larger share means more tax revenue for county governments, local school districts and special districts, which all share in the proceeds. The county relies on property taxes for about 35% of its general fund budget.
“We know it's going to come down from the current level of 6.3%,” Swebberg said. “We just didn't expect it to be so important.”
Swedberg originally projected Marin's property tax growth rate for 2023-24 to be 5.5%, but lowered that forecast by 0.5% in December due to a sharp decline in local home sales. For the 2024-25 county budget approved by supervisors in June, Swedberg projects property tax revenue growth of 5% in 2024-25 and 4.5% in 2025-26.
Swedberg said the lower-than-expected growth rate “will mean revenue is lower than budgeted. At this time we don't expect that to require cost cuts. I estimate that revenue is down by about $2 million.”
“Marin's property values are down slightly from a year ago but remain relatively stable, offsetting the downward pull from high interest rates and a combination of low inventory and high demand,” Scott said in the announcement about the new assessment. The upward momentum coming.
“In markets like Marin County, where property values are typically high, the impact of interest rates may be more pronounced,” she added in an email. “If homeowners are locked into a low-rate mortgage, they may be less willing to sell.” And taking out new mortgages at higher interest rates reduces overall sales, which I think is the biggest contributor to lower volume growth, even if property values remain strong.
In 2023, a total of 2,360 homes (single-family homes and condos/townhomes) were sold in Marin, which was a decrease of approximately 21% from 2022.
In 2023, a total of 1,688 single-family homes were sold in Marin, a decrease of nearly 24% from 2022.
Condo and townhouse sales fell from 767 units in 2022 to 672 units in 2023.
Commercial real estate sales have all but ground to a halt during the pandemic as fewer people go to offices to work and people stay home instead of dining at restaurants and shopping at malls. Commercial real estate sales have become so rare that it is difficult to assess their tax value.
“The office real estate market is currently undergoing a period of correction as demand for permanent office space decreases, resulting in vacancy rates above historical averages,” Scott said. “We are monitoring the industry closely to determine the value impact going forward. “
