Maryland issues new property assessments, with average growth for homes of 6.4 percent
Property values in Maryland rose for the fourth year in a row in the new assessments released Wednesday by the state but remain below those recorded before the housing crash.
Home values in Maryland rose an average of 6.4 percent over the last three years, according to the most recent evaluations, which the State Department of Assessments and Taxation mailed to more than 750,000 commercial and residential property owners on Wednesday.
While home values continue to recover slowly, commercial values leapt about 14 percent in the new assessments, reflecting business activity spurred by economic growth.
About 71 percent of residential properties included in this round saw assessments increase, continuing an upswing that started in 2013. The gains were strongest in counties near Washington and Baltimore, while assessments in more rural areas, like the Eastern Shore, showed little change and, in some cases, declined.
“Things are recovering,” said Dale DeWeese, an area supervisor for assessment offices in 13 jurisdictions, including Baltimore City. “Things are starting to turn around and I think they have turned around, but the more rural areas are definitely lagging.”
The state reassesses properties every three years, with a third of all properties evaluated each year. Assessors base the judgment on sales data and some in-person inspections. This year’s assessments were based on more than 68,000 sales — a sizable increase from 2013, when this group of properties was last evaluated.
The new assessments will be used for 2017 tax bills that go out in July. Increases get phased in over three years, while decreases take effect at once.
The state’s 6.4 percent growth in assessed residential values is a “pretty big jump,” said Ryan Hlubb, the managing partner of Principle Real Estate Consultants, which has offices in Ellicott City and York, Pa., and does appraisals throughout the region.
The median home price in Baltimore and the five surrounding counties was about $250,000 for the year through November, according to data from the MRIS multiple listing service. That’s up about 4 percent from 2013, with most of the gains coming in 2016.
Property owners have until Feb. 13 to appeal assessments and Hlubb suggested property owners should look carefully at the notice to see how they fared individually.
“We are catching up on the assessments and not all of them may be overassessed,” he said.
In the assessments for the 2015 and 2016 tax bills, commercial and residential properties increased an average of more than 10 percent, compared to this year’s 8.2 percent.
Anne Arundel and Baltimore counties led the Baltimore region in gains, with residential assessments up an average of more than 7 percent.
Residential values were up about 4 percent in Howard County, driven by growth in the Maple Lawn, Fulton and Clarksville areas, said Jerry Keating, assistant supervisor of assessments.
In Harford County, where the assessments focused on the greater Bel Air area, residential values rose about 5 percent.
Assessments rose 3.5 percent in Baltimore City, where the most recent evaluation cycle covered the middle swath of the city — such neighborhoods as Waverly, Belair Edison and Bolton Hill. About 30 percent of the residential properties in this round were rentals, DeWeese said.
“On the surface, I don’t think there’s any surprises here,” said Tom Weigand, owner of Treffer Appraisal Group, which performs hundreds of appraisals each year. “The residential market in particular is still in the midst of recovery from 2008, and different counties have recovered at different paces.”
The residential properties reassessed this year once were valued at the peak of the housing market, with a cash value that assessors estimated at more than $230 billion in 2008. This assessment pegs that group at about $204 billion as of Jan. 1, restraining municipal budgets even in places where recovery looks strong.
In Prince George’s County, for example, residential assessments were up 14 percent, the most in the state. But the assessed values remain nearly 20 percent lower than in 2008.
“That 10 or 12 percent growth in a place that really got clobbered doesn’t necessarily mean their cup runneth over,” said Michael Sanderson, executive director for the Maryland Association of Counties. “This growth … is still just getting back chunks of what was lost during the big bubble.”
In Somerset County, on the Eastern Shore, the assessments mailed this week showed a 6.4 percent decline in value for homes and commercial properties, the steepest fall of any jurisdiction in the state. On average these properties, which are located in the Crisfield area, have lost more than 30 percent of their value since 2008, according to state data.
The decline reflects the devastation inflicted by Hurricane Sandy in 2012, following the housing crash, said James Ward, supervisor of assessments for Somerset County. Many property owners simply walked away, he said.
“First the bubble burst and then Sandy hit,” he said. “It was like a one-two punch.”
This year’s gains are likely to have an incremental impact on budgets, officials said.
Baltimore County expects to bring in about $5 million more thanks to the increased values, said Don Mohler, chief of staff to County Executive Kevin Kamenetz. That number takes into account people claiming homestead tax credits, which limit how much bills can rise.
Anne Arundel County expects to take in about $15.5 million more in property taxes — a number that reflects rules that cap how much property taxes can increase before the county must reduce tax rates, said spokesman Owen McEvoy. McEvoy said he expects tax rates for homeowners to decline again this year.
“If we didn’t have a cap, that would be a lot more,” he said. “Overall, it shows that the economy in Anne Arundel County is growing.”
Mayor Catherine Pugh, who is working on the budget for next year, plans to continue gradually decreasing the tax rate, with the goal of cutting it by 20 cents by 2020, said spokesman Anthony McCarthy. But the city also faces a roughly $20 million budget gap to maintain current services, he said.
“Jurisdictions are feeling the pinch,” Sanderson said. “I think this coming year is going to be a tighter year than the last three or four.”