Home values fell 17% in three years, state assessors say
Notices mailed to owners Tuesday
Average drops in assessed value since 2008 range from just under 10 percent in Baltimore to 19 percent in Baltimore County. But 40 percent of the homes reassessed in the city did not fall. (Karl Merton Ferron, Baltimore Sun / April 10, 2009)
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Nine out of 10 residential properties that were reassessed lost value, the state Department of Assessments and Taxation said Tuesday. Some homes were more valuable because their owners renovated.
But assessors say they're seeing signs of stabilization in some neighborhoods — a new trend.
"There are communities that have already hit bottom and they've flattened out," said Robert E. Young, director of the agency, who sees examples in pockets across the state.
At the other extreme are neighborhoods in Prince George's County that have been pummeled by distress sales. The county's average decline in home values — 37 percent — is by far the biggest in the state.
"Over 80 percent of their market involves either a short sale or a foreclosure," Young said.
Average drops in the Baltimore region ranged from 19 percent in Baltimore County to just under 10 percent in the city, he said. Assessors revalued properties in the eastern section of Baltimore County and mainly the southern and western parts of the city, reaching as far east as Canton and Patterson Park.
Assessors revalued one-third of every jurisdiction in the state for the property tax year that begins next July, part of a cycle in which every home and commercial property is reassessed every three years. The average Maryland home reassessed last year lost a record 22 percent of its value, while the average drop the year before was nearly 20 percent, assessors said.
This year's batch of homes was last reassessed at the end of 2008, when the first losses from the housing bust were being recorded. The average decline at that point was about 3 percent. Assessors say that's one reason the decreases were lower this year than in the past two — some of the downturn had already been baked in.
Owners of reassessed property should get details soon. Notices were mailed Tuesday.
It's hard for a homeowner to decide how to react to falling assessments, said Carlos Plazas, who lives in Patterson Park, one of the Baltimore neighborhoods the state just revalued. He likes the idea of a lower tax bill, but it would also mean that homes in his neighborhood have lost value.
"I don't know if it's a good thing or not," said Plazas, an accounting manager.
And some residents will find when they get billed in July that their taxes have gone up even though property values dropped. That seeming contradiction is caused by the state's Homestead Property Tax Credit, which caps increases for homeowners.
Once residents have lived in their homes for a full tax year, the amount of assessed value they're taxed on can't rise more than 10 percent annually. Many jurisdictions have even lower limits — it's 4 percent in Baltimore and Baltimore County, for instance.
Because the past few years of falling values haven't erased all the gains of the housing bubble, thousands of homeowners are still paying on less than their properties' full assessed value. So, their next tax bill will be higher than the last as they close the gap.
That might be aggravating for the homeowners — though they are still getting a break on the full tab — but budget officials appreciate the revenue.
"That cushions us somewhat," said Don Mohler, the Baltimore County executive's chief of staff.
Mohler said foreclosures and short sales are depressing home values, but local officials are optimistic that the worst is over for housing prices. "Hope springs eternal," he said, "and we certainly are on that side of the ledger."
Location matters in real estate, but assessors are seeing changes in value based on property type, too.