Home values in Maryland communities reassessed by the state this year have fallen an average of 17 percent since 2008, a sizable drop but smaller than in the last two rounds of property evaluations.
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.
In Howard County, where the eastern section was reassessed, older condos and homes restricted to residents 55 and older saw the largest decreases, said Renee Mierczak, the local supervisor of assessments.
Condos were also hard hit in Anne Arundel County, said Joseph Glorioso, supervisor of assessments there. Average condo values dropped about 22 percent, compared with roughly 17 percent among townhouses and about 14 percent for single-family homes, he said. The southern part of the county was reassessed, reaching as far north as Annapolis and Crofton.
"It's very rare that anything rose," Glorioso said.
More than 90 percent of homes lost value in reassessed portions of Anne Arundel, Baltimore, Carroll and Howard counties, according to the assessments agency. But 40 percent of the homes reassessed in Baltimore city and 34 percent in Harford County did not, assessors said. Those values were not increasing so much as holding the line.
Harford got a lift from the nationwide military base realignment that sent thousands of jobs to Aberdeen Proving Ground over the past several years. The average assessment in the county fell a little more than 10 percent.
Harford County had the state's biggest increase in commercial values — 9 percent. The commercial tax base swelled over the past three years as developers built office parks near the Army base and apartments filled with new workers, increasing their value.
"There's a lot of activity," said Nancy Schmidbauer, supervisor of assessments in Harford County.
Commercial values fell in much of the state but were flat in Baltimore. Scott Basik, a Baltimore attorney who specializes in commercial assessment appeals, said some properties are holding their value but many others are declining — it depends on how occupied the buildings are. Commercial properties' assessments are influenced by the amount of income they produce.
Basik said he's seeing especially big declines in the downtown area, which won't be reassessed until next year. But that doesn't mean appeals must wait.
Property owners — commercial or residential — can appeal their assessment in any year. The deadline for properties that haven't just been reassessed is Jan. 3; owners of newly revalued properties have until Feb. 10 to appeal.
"There could be almost as many out-of-cycle appeals … as for the areas being reassessed," Basik said.
twitter.com/RealEstateWonkCopyright © 2015, The Baltimore Sun