Dating back to the rough start of the current (ongoing) rally in local home prices, the assessed value of properties in Manhattan Beach has risen 65%.
For the 2013-14 tax year, Manhattan Beach properties (all types & locations) were assessed at a total value of $14.12 billion.
Eight years later, for 2021-22, Manhattan Beach values hit $22.19 billion, a jump of $8.07 billion.
To be clear, this includes residential properties as well as commercial properties, although of course here at MBC, we focus on residential real estate.
One might say, well, a rising tide lifts all boats. Manhattan Beach is gaining in property values just like every other market.
But this pace of value increase in our city is far greater than in the county as a whole. Los Angeles County assessed values grew 35% over the same period of time.
We took a look at a period of time that’s comparable to the period noted above in the overall assessed-value chart.
You’ll see that for each of the past 5 years, the total value of homes sold in Manhattan Beach has exceeded $2 billion. Indeed, due to a few fat years, the average across all 9 years was $2.32 billion.
(One of those fat years, a very fat year, was 2021, with $3.554 billion in sales. We first published that figure here in early January in “One Billion More,” our market update for year-end 2021.)
The total of all these residential real estate transactions over 9 years was just short of $20.1 billion.
You might note a disconnect between the $20 billion in sales and the $8 billion in overall increase in assessed values. But these figures describe different things. To be clear, again, the overall assessed values include all types of properties, not just residential sales. And nearly all properties are subject to the 2% annual increase in assessed value.
Still, residential sales do contribute markedly to the overall rise in assessed values in the city. The question, in each case, is what is the delta between the old value (assessed) and the new purchase price.
If a home was previously purchased for $1.5 million and sells for $3.0 million, the increase in assessed value is something near $1.5 million (less any 2% annual increases).
If an old home with a very low assessed value is sold and a large, pricey new home is built, the city’s overall assessed values could rise by $3 million, $5 million or more, from just the one property.
This process is one reason why Manhattan Beach property tax revenues rise steadily.