Baltimore City homeowners saw some of the region's steepest increases in the recent round of property reassessments, a stark change after years of lagging home values - and added ammunition for groups calling for tax relief.
In the city, which has the highest property tax rate in the state, nearly one in five reassessed homes saw values at least double since they were last evaluated three years ago. No other jurisdiction in the Baltimore region had such a high share, according to a Sun analysis of state records for owner-occupied homes.
The city also claims the ZIP codes with the fastest-escalating residential assessments. The average market value doubled for reassessed homes in the neighborhoods of Medfield and Hoes Heights - north of Hampden - and nearly doubled in the western half of Cross Country and Fallstaff, neighborhoods in the city's northwest corner. Some home assessments went up even more.
"I just have a plain little stone rancher, nothing fancy or anything," said Mary Conaway, a Cross Country resident who bought her home 11 years ago and couldn't believe her new assessment: nearly $550,000, up from about $200,000 three years earlier.
But increases were substantial in the suburbs, too. Average assessments rose at least 40 percent in every reassessed ZIP code, even ones heavy with million-dollar homes. Across the region, the gain in assessed values outpaced the rise in sale prices over the same period.
Many homeowners won't feel the full impact for years because increases are capped for all except the newest owner-occupants. But some are enraged by the new values all the same, convinced that the assessments are higher than the amounts they could possibly sell their homes for. This assessment cycle, which takes in about a third of each jurisdiction, is the first to straddle both the housing boom and the more recent slump.
"It'll be a cold day in hell the day someone gets $900,000 for a home in this neighborhood," said Perry Huntley, a homebuilder who judges that his waterfront house in Pasadena is overassessed at about $923,000. He said it was appraised for $100,000 less when he built it last year. He added that he believes local values have dropped since. "Everybody, everybody I've talked to, has complained about the property taxes. ... I think [state officials] are going to be inundated with appeals," he said.
They haven't been yet, though they note that people tend to wait until the last minute. The deadline to appeal is Feb. 12. Owners were notified of their new assessments in letters mailed Dec. 29.
More affordable homes tended to see the biggest increases. Baltimore County's west side, the section reassessed this time, has the lowest average home price among the reassessed suburbs - and saw the biggest jump by far, at an average of 76 percent.
"I appealed it - I was furious," said Owings Mills resident Dianne L. Stern, a real estate agent whose assessment more than doubled, to about $600,000 from roughly $275,000.
She added: "If someone wants to come and pay me $600,000 right now, they can have this house."
Baltimore County's overall increase edged out the city's, which was 73 percent. That's because the city has extremes at both ends - homes with declining values as well as the fastest-appreciating properties.
Even so, it seems a watershed moment for the city. In the past three reassessments, when home prices were still bounding rapidly upward, Baltimore's increase ranked last in the region.
City residents are gulping at this change of fortunes and taxes. Realtors and others are pressing the city to change its tax rate, lest it derail efforts to add population after years of decline.
"If you talk to people that have recently moved to Baltimore ... there's a high concern about what they're paying, because they haven't received a break," said Federal Hill resident Keith Losoya, community liaison with the Baltimore TEA Party, a nonprofit whose acronym stands for Tax Education and Action.
Strong feelings aside, the region isn't facing the tax revolts hitting some states. And the number of appeals in recent years hasn't surged the way assessments have. That's likely because tax bills aren't rising as quickly as assessments, either. Owner-occupants who have had their homes at least one full fiscal year see their annual increases capped by the Homestead Property Tax Credit - which, within the region, ranges from 2 percent to 10 percent.
New homeowners aren't so lucky. But many of them aren't paying taxes on the full assessment, because the increase is phased in over three years. Once they mark their second July 1 in the home, they're entitled to the cap.
While this moderates the impact, it means homeowners will face steady increases for years, even if home values stagnate. In Baltimore City and Baltimore County, where the cap is 4 percent, it would take nearly 20 years before these hefty new average assessment increases would fully show up in the tax bills of homeowners who don't move. At that point, their homes would have been reassessed six more times.
Some are thinking about what they will be paying, and it makes them nervous.
"It's a double-edged sword, no doubt about it," said Kirk Mercer, 53, who was "somewhat shocked" to see his family's house in western Howard County reassessed at $627,300 - a 70 percent increase. "We're delighted to see values around us are skyrocketing, but we may end up living here a very long time. If these assessments continue to go up, we're going to feel the brunt of these taxes at some point. When we retire, we'll be on a fixed income."
In Howard County, the region's most expensive jurisdiction, assessors are getting angry calls from residents demanding, "Didn't you read the newspapers? Property values are going down!" The answer from Howard Levenson, supervisor of assessments there, is that sales have slumped, not home prices.
But price increases have slowed to a crawl on average across the region, and some metro area residents say values have dropped in their neighborhoods since the housing boom ended in late 2005.
C. John Sullivan Jr., director of the state Department of Assessments and Taxation, said assessors paid close attention to the changing market as they valued homes. Though they typically would have considered sales data from 2005 through the first half of last year to help with valuations, they extended their reach into October this time.
"When people look at what properties are selling for in their neighborhood and you see ... that the price has been reduced on a home, I can almost promise you that the number that it's reduced to is still above the market value that we have assigned to that property," said Sullivan.
Still, The Sun found that sales prices in the region's reassessed areas did not rise as fast as the values assigned by the state. Assessed values rose 63 percent across the region. Average sale prices rose 44 percent over the same three-year period, according to an analysis of state data.
Only a small share of the reassessed homes were included in the sales. And assessors consider the cost to replace a property as well as the sales price for similar residences, state officials noted.
The Sun also looked at newly reassessed homes recorded as selling on the open market last year, to compare prices against the state's valuation. The analysis found many more homes were assessed at least 5 percent below their sale prices than above: about three in 10 vs. one in 10.
Even in such a seemingly apples-to-apples comparison, there might often be reasonable explanations for differences between sales price and assessed value. Sullivan's staff, looking into a dozen examples from the analysis, offered details beyond the raw numbers for them all. One "sale" was actually a refinancing, incorrectly recorded. Another was for an old house, but the buyer immediately tore it down and put a pricier one in its place.
In the case of a Baltimore County assessment that was $260,000 less than the sales price, the answer was simple: "That was purchased in May of '06, but it burned down July of '06," said Bill Stansbury, state supervisor of assessments.
Overall, pricey Howard County saw the region's smallest average assessment increase - 54 percent. The big jumps were clustered in Baltimore and nearby, in less expensive neighborhoods. (Timing plays a role: The west side of Baltimore County, the part reassessed in this cycle, has less expensive homes on average than the north part of the county, which was not reassessed.)
Harold Lloyd, a veteran tax protest leader who lives in northern Baltimore County, said he thought the trend was clear.
"Your little two- or three-bedroom ranchers closer to the city line are a better bargain," he said. "The ones farther out are pricing themselves out of the market."
In the city, increased calls for tax reform have followed the rapidly increasing assessments.
The Greater Baltimore Board of Realtors is pressing the city to make a significant reduction in its property tax rate, more than the two-cent drops leaders have pushed through in each of the past two years. The group fears that buyers will shy away from Baltimore just when the city seems to have a shot at ending decades of population drain.
A property tax rate twice what most other residents in the region pay wasn't as problematic when city values were low and virtually stagnant, but "there's no longer that offset," said Joseph T. "Jody" Landers III, executive vice president of the board of Realtors and a former city councilman.
Baltimore Mayor Sheila Dixon said she will unveil plans in her State of the City speech tomorrow for a "blue ribbon" committee that will make recommendations for long-term change to the property tax system. She said she favors "substantial reduction" to the property tax rate and a change in the way the state values properties - she thinks commercial sites are underassessed - but she cautioned that major change shouldn't come immediately.
Every one-cent reduction in the property tax means the city forgoes nearly $2.4 million in revenue, according to Raymond S. Wacks, the city's budget director.
"Cutting it by 50 cents would be a major disaster for the city at this point, but you've got to put something in place to begin to change the structure," Dixon said.
Baltimore City Council President Stephanie C. Rawlings Blake, who expects that pocketbook issues will take center stage with the mayoral election looming, said she's hopeful that leaders will push through significant property tax relief this year.
"We're trying to fight flight, and you don't fight it with marginal change," Rawlings Blake said.
In Medfield and neighboring Hoes Heights, the city neighborhoods where average assessments saw the biggest jump, residents said they were concerned about taxes even before the increase. For the several hundred homeowners there who aren't due to be reassessed until next year, it's an unpleasant preview of things to come.
"A lot of these folks are of retirement age," said Richard Kaminski, president of the Medfield Community Association. "I'm sure there's going to be conversations in the community meetings."
Still, he can understand why values are rising.
"It's one of the last affordable places," Kaminski said. "One of the good things ... is we share all the amenities of the higher-tax homes in Roland Park and Ruxton."