Howard County residents are used to getting new year shocks from the property tax assessor, but many weren't prepared for the one they got this year.
Nearly half the 23,480 properties assessed in Ellicott City and west Columbia the past year declined in value, some by more than 10 percent; the others increased.
A similar assessment picture is expected a year from now when another third of the county -- Savage, North Laurel and the rural west -- is reassessed, and two years from now when east Columbia and parts of Elkridge get their turn.
Double-digit depreciation is a new phenomenon for Howard County real estate after the boom years of the 1970s and 1980s, when double-digit increases were the norm. Although the latest county assessments rose an average of 3.4 percent, that's a far cry from the 18 percent rise in 1991.
The county's stagnant real-estate values mirror the statewide trend. Statewide assessments rose 1.9 percent this year, compared with 21 percent in 1991.
"The years of double-digit increase are long gone," said Ronald W. Wineholt, acting director of the state Department of Assessments and Taxation. "I don't see any rapid appreciation on the horizon in most areas that I'm familiar with."
Lower assessments can be a mixed blessing. They mean lower property taxes, but they also can reflect an actual decrease in market values.
Real estate agents insist that houses often sell for more than their assessed value. But many homeowners worry that reduced assessments will translate into lower-than-expected resale prices.
And market information suggests that may be happening. According to the Howard County Board of Realtors, the average price of a condominium dropped almost 1 percent last year while the average price of a single-family home rose just 2.5 percent.
Deadline for appeals
Property owners have until Feb. 13 to appeal their assessments. one has appealed to have an assessment increased. Most are nervously pocketing the tax savings and hoping that the lower assessments won't hurt their properties' market values.
That's the situation facing one resident in the Columbia village of Dorsey's Search, who has seen the assessed value of his 9-year-old Colonial drop from $245,000 three years ago to $218,000.
"I was aggravated at first," said the owner, who insisted on anonymity before he would discuss the details of his assessment. "But then I started thinking about the tax break I'll be getting."
The lower assessment, which will be phased in over three years, could save him $233 next year, $466 the year after and $699 the year after that, he said.
But his request for anonymity -- "You're not going to put [the drop in assessed value] in the paper, are you?" -- is typical of the anxiety felt by many of those who see the potential value of their properties plummet.
Steven B. Kramer, who lives in the Longfellow neighborhood of Columbia, said the assessed value of his 25-year-old home "dropped about $2,000" in the latest round from what he said was an unreasonably high assessment of $160,140 three years ago.
The last time, he said, "I was just furious. This year was a lot more moderate. It's great as far as property taxes are concerned."
But when it comes time to sell his house, he said, "I hope the resale value is $20,000 more than assessment value. If not, I'm going to be pretty upset."
'Sale signs up for years'
Ellicott City resident Gail Ciccarello takes the opposite view. She thought her 1991 assessment was $20,000 too high and views the 3 percent drop in the new assessment on her 5-year-old Centennial Manor as "a true reflection of the value of the house."
"I've been keeping an eye on housing prices, and they're not going up," Ms. Ciccarello said. "People around here have had 'For Sale' signs up for a year, but they just don't sell."
Link to sales price small
County assessor Howard Levenson said that there is not much of a link between tax assessments and sale prices.
Assessments have "no effect on potential sales," he said. "If a house is valued at $120,000 that doesn't mean it can't sell for $140,000. What it does mean is that the property tax bill will be a little less."
But some real estate agents say the lower assessments give an accurate picture of the sluggish market.
"Values have dropped back to what they were four years ago -- there's no demand," said Jean Iamperi Quattlebaum of O'Conor, Piper and Flynn. "Instead of taking 60 to 90 days to make a sale, you're working six to nine months to make a sale."
The new assessments are not out of line, agreed Al Cooke, president of the Howard County Board of Realtors. "It's not like they had fallen off 20 percent," he said. "Obviously, in certain areas, resale values have gone down. But new houses seem to be selling very well."
No longer viable
But other real estate agents say that assessments and sales prices are quite separate. "When Realtors help sellers price houses, we very rarely look at the tax assessment," said Dave Leonard of Remax. "Once you get beyond six months, the figure is no longer viable. The market can slow down or pick up within six months."
Instead, agents look at what comparable homes have sold for in the same neighborhoods -- prices that can be far different from what the assessment would have suggested.
In Dorsey's Search, for example, the house that plunged from $245,000 to $218,00 in assessed value is on the same street as a similar home now on the market for $259,900. Another, smaller house on that street has a $220,000 price-tag -- $35,000 above its assessment of three years ago.
And last February, a house on Ms. Ciccarello's street in %o Centennial Manor sold for $285,000 -- $36,350 more than it was assessed for three years ago.
"Howard County has always had a strong market, and it continues to be a terribly attractive place to live," said Lin Eagan of Long and Foster, who saw the assessment on her own 2-year-old home in Hobbit's Glen plummet. "Just smile [because of lower taxes] and hang on."
In the meantime, Mr. Wineholt of the state assessments office is resigned to the fact that homeowners may react badly to any changes in assessments, up or down.
"Our job is to appraise based on market values," he said. "If it's up, it will be deemed a crisis by some people. If it's down, it will be deemed a crisis by some people."