Home values in Baltimore are increasing at least as fast as those in several prosperous suburbs such as Frederick and Montgomery counties, although property values statewide continue to grow slowly, assessment officials say.
More than 650,000 tax assessment notices showing an average increase of 1.3 percent per year begin arriving in homeowners' mailboxes today, under Maryland's system of reinspecting a third of each jurisdiction's homes annually.
The sluggish growth in values has a silver lining for property owners: Tax increases, which are based on assessed value, will be small during the next three years.
Baltimore's average assessment increase is 0.9 percent.
The prosperous central third of Baltimore County is up 1.7 percent.
Fast-growing northwestern Anne Arundel County increased 1.9
percent, while Howard County's southern and western third rose 1.7 percent.
Harford County's central core increased 1.9 percent, and Carroll County's northeastern sections went up 2.1 percent.
Across the state, the increases are little changed from last year, when the average increase was 1.1 percent.
Fifty-eight percent of the 650,000 homeowners receiving notices will see increases. Forty-two percent can expect no change or a reduction in their assessments, below the levels of January 1996, when their properties were last inspected.
Local assessment caps will limit tax increases in some jurisdictions, though local governments are free to raise their property tax rates.
However, most local officials are reluctant to take that step.
In rapidly growing Howard County, property tax rates haven't increased since July 1991, although county Budget Director Raymond S. Wacks said sluggish property tax revenues "are not sufficient to support growth in county services."
Inflated income-tax growth has bailed out the county in recent years, he said, "But the question is, will that continue?"
Slower-growing Baltimore County also counts more on income taxes to drive revenues, said County Executive C. A. Dutch Ruppersberger.
"This was what we anticipated," he said.
Baltimore's 0.9 percent increase equaled Montgomery County's and was higher than those in Charles, Frederick, Kent, Prince George's and Somerset counties.
Stock market's impact
Statewide, average assessment increases ranged from a high of 3.3 percent in Garrett County to a low of minus 0.2 percent in Kent County on the Eastern Shore.
"People are not looking at real estate as an end-all investment, especially with the stock market going up," said David Lowe, supervisor of assessments for Montgomery County, where wealthy areas such as Potomac and Bethesda were reassessed.
A factor in judging the assessments is which section of a jurisdiction gets examined.
In Prince George's, where the average increase was 0.2 percent, the more rural northern and southern sections received notices this year.
In Baltimore, notices last year went to the wealthiest northern third and the Inner Harbor area -- and the average increase was 2.4 percent. This year, the city's middle tier received notices, and the assessments were lower.
First-time buyers in city
Several observers believe that Baltimore is benefiting from young, first-time homebuyers who are taking advantage of lower prices and housing incentive programs in older city neighborhoods.
"There's been an enormous rise in demand for entry-level homes [in the city], because interest rates are low. This group will grow over the next five to 10 years," said Anirban Basu, senior economist at the Regional Economic Studies Institute at Towson University.
"The question is, when they trade up, will they trade for a city home or go up -- and out of the city?" he said.
Greater Baltimore Committee President Donald P. Hutchinson said, "Obviously, we're steadying a bit here."
The challenge for the city, he said, is "to solve problems that affect black, middle-class citizens who are still leaving for the suburbs."
The slow increase in property values is occurring during a brisk home-sales market.
Prices not inflated
"To me, the real surprise is that the number of sales the last several years has been very active, yet it hasn't translated into bidding up prices. In most counties, we're not seeing an inflation of prices," said Ronald W. Wineholt, director of Maryland's Department of Assessments and Taxation.
Altering that, Basu said, would require higher-paying jobs and more affluent people buying bigger homes.
"The bulk of new jobs continue to be concentrated in retail and certain lower-paying service sectors," he said.
As the young people buying their first homes mature and prosper, he said, things could change.
In Baltimore, sales are up 38 percent over last year, said Marc Witman, president of the Greater Baltimore Board of Realtors.
But the average selling price of a city home was up $1,400 in November, compared with the same month last year.
"This year is the first we've seen upward pressure on pricing," he said, adding that Realtors aren't complaining about flat prices.
"From our perspective, we're doing great," he said. "The general health of the economy is making people feel good."
With assessments rising modestly, the tax protesters of recent years have little to complain about.
In 1990, the statewide average increase was 14 percent.
'Not a major issue'
Property Taxpayers United, once able to attract hundreds of enraged people to Hereford High School meetings, draws about "30 at most" to its gatherings, says group leader Harold Lloyd, a former state assessments employee.
"It's not a major issue," he said. "Inflation has cooled."
The state has made all assessments available online, at http: //www.dat.state.md.us.
Pub Date: 12/30/98