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Baltimore has the region's least expensive homes on average, so you might think it would see an outsized benefit from a tax credit aimed at getting first-time home buyers to the settlement table. Instead, the city's sales have increased the least. Only last month, in fact, did they stop falling compared with a year earlier.

Baltimore economist Anirban Basu is convinced the city's property tax rate is to blame.

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The city's rate -- $2.268 for every $100 in assessed value -- is more than twice as high as the property tax rates in Maryland's counties. Baltimore County comes closest, at $1.10 per $100. The difference has for years frustrated residents, given city real estate agents indigestion and prompted talk that "something must be done." (The rate is six cents lower than it was in 2002, but most of the Baltimore suburbs lowered their rates, too.)

"We know that people who transact on the basis of an $8,000 tax credit care deeply about their tax exposure," said Basu, who has called for a steep drop in the city's rate. "It's unlikely that people who are looking to minimize their tax bill would choose the city first. It's not that nobody bought in the city, ... it's that not as many people bought in the city as had been anticipated by analysts."

He called on city leaders to lower the property tax rate now, despite the tight budget situation.

"The point is, you can't tax people who don't live here," Basu said. "What the tax is doing is keeping people who would want to live here from being here. ... There's now growing pent-up demand to move out of the city, and this demand is motivated by a desire for greater value."

Read on for a chart, a poll and Basu's thoughts on what drove buyers to the city in a big way during the bubbly years.

"During the speculative period of the middle part of the current decade, value was not the main criterion guiding decision-making," Basu said. "The main criterion was perceived investment value. And there was a feeling among buyers that the city's performance would be strong relative to the counties in terms of percentage increase in values over time."

Here's the sales trend in the Baltimore housing market so far this year, according to Metropolitan Regional Information Systems data:

Economist: Lower Baltimore's property tax rate now

So -- what do you think about Basu's argument?

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