Reading the Assessment Tea Leaves

January 28, 1994

There's news for homeowners in east Columbia: Their property assessments are about where they were three years ago, and in some cases have plunged. The question is: Is this good news or bad?

It's a double-edged sword actually. Lower assessments translate into lower taxes. But they also can mean a reduction in the value of a home. Take, for instance, the residents of the village of Kings Contrivance. Homeowners in the village's Dickinson neighborhood probably relish the way their appraisals have turned out. Between 1987 and 1990, appraisals jumped 25 percent, an appreciation of about $25,000 on a $100,000 house. Since 1990, however, the average appraisal has dipped slightly, about .6 percent, the difference in value being negligible. The lower assessment means lower taxes with next to no value lost.

But take residents in the Huntington neighborhood of Kings Contrivance. Their appraisals have decreased by almost 13 percent since 1990, a loss of $13,000 on a $100,000 home. That may be comforting for the persons intent on sticking around for a while and worried about their property taxes. But for the persons with a house on the market, the loss in value can be devastating.

The new assessments affect not only Columbia east of Route 29, but also parts of Ellicott City and Elkridge. Overall, the property assessments in this area mushroomed 29 percent between 1987 and 1990. Now they have slowed to 3 percent. In east Columbia alone, the increase has been about 2 percent this year, compared with a 23 percent increase between 1987 and 1990. The shrinking increases can be explained away as a simple correction in a previously runaway market. Realtors, not surprisingly, say they are not concerned about the decline, insisting that sales remain strong with houses selling above assessed valuations.

But, as the prolonged recession has shown, interpreting the economic comeback requires a penchant for realism and a taste for the melancholy. Growth in 1980s terms may never come again. Peaks and valleys appear more likely, and valleys bring pain. Property assessments are no different. There is relative comfort in enjoying the lower taxes that come with a decline. But a loss in value is a real loss. Years can make up some of the difference, but you never really get it back.

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