LA County Land Values

LA County Land Values

Median land values per square foot in 2010 dollars for every block group in LA County. Click on a block group to get more details.

(Real) Land Values

Are you curious how residential land-values look in LA County according to the County’s Assessor parcel data? Well, you’re in luck.

Above is an interactive map of the median land value (per sqft) in every LA County Census Block Group. The values are in 2010 dollars discounted using US-shelter price index from BLS. I restricted observations with land-base years to be after 2010 to show value estimates more relevant to LA County today.

A few take aways, it doesn’t matter whether I deflate land-values to their exchange date or adjust for inflation. The correlation between all three land value estimates is .99 or more suggesting that relative parcel rankings are rather indifferent to adjustments.

On the other hand, the time period used for estimates does matter. I compute land values in three different ways. First, I just pool all parcels with a land value base year that is after 1975 (pooled). Second, I only use parcels with a land value base year after 2009 (recent). Third, I use the entire sample but I weigh every observation by the inverse squared distance of the base year from the most recent land base year in a block group (weighted). The correlation between the pooled and recent methods is 86%, the correlation between recent and weighted is 81% while the correlation between weighted and pooled is 67%.

Details

The exercise is rather simple. The assessor’s data give me the estimated land value of every parcel in LA County along with its GIS-estimated parcel size and the year in which the parcel exchanged hands. The latter is important due to Prop 13 that limits the annual increase of one’s parcel value to 2%. This means that the year in which a parcel last exchanged hands is the last time we observed a parcel’s market value. This also means that to get at a parcel’s real value, I have to do some wrangling. Of course, I also restrict the parcels to be in a residential land-use with a residential building of type 1-5 (see use codes for details). I also drop the max and min values of every year and exclude all block groups with only one parcel or observation.

To get the real value of each parcel, I first discounted its 2020 land value by 2% for every year since the parcel last exchanged hands and then adjusted the deflated value for inflation. For example, if the parcel last exchanged hands in 2010 for $500,000 then the parcel’s real land value is $500,000/(1.02^10)/1. To get Census block group averages, I just averaged the real land values.

In the graph below, I compare the three land-value estimates from 1980 to 2020. The takeaway is it makes little difference what type of value estimate we use as they track each other nigh-exactly. Of course, with a correlation of over .99 between the three values, this would be expected.

Below is a plot of the number of residential parcels with a particular land-base year. The high of 1975 most likely corresponds with the passage of Prop 13 so every home that hasn’t exchanged hands since then has had it’s base value pegged to what it was in 1975. One tempting conclusion is that the property market in LA County has been getting progressively hotter as measured by number of exchanges per year. This conclusion isn’t quite correct. For example, suppose in 1990, 100,000 parcels were sold and in 2020 the same 100,000 re-sold to a new owner. In these data, these 100,000 exchanges would show up in 2020 but not in 1990; thus, masking the activity of earlier years. The other potentially misgiving element is that the number of parcels has been increasing in LA. Think of all the master-plan communities that have been erected on land that was formerly a single ranch. As such, even if the share of homes that exchange in any given year doesn’t change over time, we’ll see an increase in the number of exchanges.

You want the underlying data?

Sure thing, just e-mail me and I can send over the parcel-level data.