Real estate prices in Alameda County are faltering as price growth slows significantly

Real estate prices in Alameda County are faltering as price growth slows significantly

A drone view of the skyline in downtown Oakland, Calif., on Wednesday, March 13, 2024. (Jane Tyska/Bay Area News Group)

OAKLAND — Real estate prices in Alameda County are rising at their slowest pace in three years, and attempts by office building owners to appeal assessments could further damage values.

Property values ​​in Alameda County totaled $435.85 billion in fiscal year 2024-2025, up 5.1% from the $414.86 billion in assessed values ​​for fiscal year 2023-2024, according to the County Assessor’s Office. The latest assessment list represents an official snapshot of values ​​as of Jan. 1, 2024.

The Landing, a two-building office complex at 303 and 333 Hegenberger Road in Oakland. (Google Maps)
The Landing, a two-building office complex at 303 and 333 Hegenberger Road in Oakland. The two office buildings were sold to their lender in foreclosure earlier this year, suggesting that the building values ​​have plummeted. (Google Maps)

“The real estate market has been particularly affected this year … by rising interest rates,” said Phong La, Alameda County tax assessor, in a prepared press release announcing the new overall tax list.

Although Alameda County property values ​​increased in the most recent sample from the January 2024 tax rolls, the pace of increase was much slower than in recent years.

The January 2023 assessment sample increased 7.3% year-over-year. The January 2022 sample represented a 7.8% increase year-over-year. The January 2021 benchmark was 4.6% higher than the previous year.

The sluggish increase measured from January 2021 was to be expected given the economic shocks caused by the coronavirus.

The economic side effects of the coronavirus included widespread business closures, leaving countless office buildings, commercial properties, retail stores and restaurants vacant.

A slow return to the office market and job cuts in the technology industry have led to a decline in corporate demand for office space. More office space is being offered for sublease and office leasing activity has declined.

This in turn has led to falling office rents and a reduction in the value of office buildings.

More and more office buildings have fallen into arrears. The waves of loan defaults and foreclosures have also submerged and weakened the value of commercial real estate.

Real estate values ​​in each California county provide more than just a snapshot of a region’s economic vitality and the condition of a city’s commercial and residential properties.

Property taxes, which are derived from the assessed value of a property, also represent an important source of revenue for a range of services provided by numerous county, city and regional authorities and administrations.

“The tax list provides funds for roads, public safety (including police and fire), public schools, medical safety services (such as hospitals and clinics), cities and local special districts, as well as water, parks, health care and utilities,” the Alameda County Tax Office reported this week.

The property tax also plays a major role in financing public education, the expert explained.

It is also possible that the current total valuation amounts will decrease.

Alarmed by falling office, retail and hotel property values, more and more commercial property owners are hoping to persuade Alameda County authorities to lower their fees and property taxes.

“The number of property assessment appeals is increasing, particularly for office buildings, shopping centers and some residential properties,” the Alameda County Assessor’s Office reported. “The outcome of these appeals can have a significant impact on local services.”

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