Keith is correct -- there's no impact when you're selling. You can't draw any reasonable conclusions by comparing "assessed value" with "market value" because Prop 13 caps any increase in assessed value to 2% per year. Consequently, many homes are worth more than their assessed value, even in this lousy economy.
Whoever buys your home will get a supplemental tax bill that will bring the assessed value up to the new sales price. It sounds like you already researched the "Decline in Assessed Value" route with San Mateo County, but if you haven't, here's a link that will get you to the online application: http://whiteoaksblog.com/2008/12/16/reducing-your-property-taxor-maybe-not/
Best of luck!