Even though the state’s tax assessment system has the effect of muting the volatility of property assessments, 11 of the state’s 12 largest counties experienced a decline in their property tax roll this year.
* * *
Even the center of the Silicon Valley, Santa Clara County, was unable to avoid a shrinking roll.
“This is far worse than anyone had expected,” County Assessor Larry Stone said in the news release announcing the tax roll. The roll dropped 2.44%, by $7.4 billion.
“This county has not experienced such a devastating drop in property values since the Great Depression,” he said.
- - -
The data show this isn't a typical real estate correction cycle in which prices fall back to earth following a boom. They're actually falling into a deflationary hole in much of California, which along with Nevada has suffered some of the steepest declines in real estate value in the nation.
Economist and New York Times columnist Paul Krugman recently wrote that Federal Reserve Chairman Ben Bernanke, who studied the Depression of the 1930s for his doctoral dissertation, so fears deflation that he reportedly said he'd toss sacks of $100 bills out helicopters to prevent it. Memo to the Chairman: deploy a squadron of black helicopters bearing bags of Benjamins to California, starting in my ZIP Code.