Property values rise 2.4% in city Surprising showing best for Baltimore since 1992 figures

'Encouraging for region'

Statewide average for growth rate barely tops 1%

December 30, 1997|By Larry Carson | Larry Carson,SUN STAFF

Baltimore property values, increasing at the highest rate in years, have topped the growth rate of most area counties, say officials who yesterday sent out 616,000 new assessment notices statewide.

In a generally sluggish real estate market, Baltimore's surprising showing -- for properties in the city's northern third and its downtown office core -- beat four surrounding counties and tied Carroll's 2.4 percent growth rate. It also exceeded the state's average increase of 1.1 percent.

"This is the highest increase for the city since 1992," said state assessments director Ronald W. Wineholt.

"It's encouraging for the entire region for the city to see some property values increase," added Donald P. Hutchinson, president of the Greater Baltimore Committee.

Figures across Maryland reflect a pattern of sluggish growth in property values -- down from a 14 percent statewide average increase in 1990.

The latest figures bear no relation to the booming economy, which is expected to produce a statewide income tax surplus of more than $260 million this year, said Michael Funk, a research economist with the Regional Economic Studies Institute at Towson University.

Among the factors that have kept Maryland's real estate market relatively flat, he said, are low inflation, a large inventory of homes for sale and the shrinking number of 25- to-35-year-olds, who are often first-time homebuyers.

"People need to understand that you're never going to see the kind of property appreciation we saw years ago. The main reason for that in the 1970s and 1980s was the trend to dual-earning households. That scenario is completely played out," he said.

The latest assessments, based on the previous year's sales, are used to figure property tax bills that go out each July 1. A third of Maryland's 1.9 million property owners will receive new assessments in this week's mailing. A different part of each locality is covered over a three-year assessment cycle.

No locality's average property value increase topped 5 percent. Baltimore's 2.4 percent average increase equaled any in the metro area. Baltimore County's 0.7 percent average increase was lowest.

Baltimore's report also contained some bad news, said Douglas Brown, public policy analysis supervisor in the city budget office.

"Basically, you're seeing the effects of the recession now undone in a residential market," he said, referring to the northern third of the city. "The sad thing is in our downtown commercial core. This is the real estate boom the assessment cycle misses."

The new assessments are based on sales that occurred before the downtown area began an upturn, he said, so events such as the IBM building's sale for $137 million were missed. By the time the downtown properties are inspected again in three years, he said, "the Hong Kong flu might be here."

Both Baltimore and Anne Arundel counties slipped a bit from last year, but local officials downplayed the changes.

"The property tax is not our growth area," said Michael H. Davis, spokesman for Baltimore County Executive C. A. Dutch Ruppersberger. "We've really been looking at income tax numbers," he added, referring to estimates of a $21 million unanticipated surplus this year.

The county's drop from last year's average 1.4 percent increase means less than $1 million in lost revenues, officials said. The western third of Baltimore County was inspected this year.

Harford County's average increase -- based on assessments in the most rural northern and eastern sections, plus Havre de Grace and Joppatowne -- equaled last year's 2.3 percent.

Howard's 1.4 percent average increase, for the Ellicott City-midcounty area, reflects slow sales of expensive homes, officials said.

Carroll's 2.4 percent average increase was up slightly from last year.

But the lack of a larger increase reflects recent efforts to slow growth in the southern regions, including Eldersburg, which were reassessed this year, said Steven D. Powell, county director for management and budget.

"It's definitely slow. There's still been this sort of outward migration that has allowed us to remain stable," he said.

To curb congestion, he noted, the county has an interim growth control law and a permanent growth management policy under development.

Statewide, Caroline County topped the list with a 4.7 percent average increase. Cecil County was at the bottom, with a 0.3 percent average increase.

In Caroline County, assessment supervisor Dana Jarrell speculated that sales to people moving farther from suburbanized Kent and Anne Arundel counties might account for the increases.

"You get a lot for your money here," she said, noting that a com- muter can be in Annapolis in one hour, and in Baltimore in a few minutes more.

Pub Date: 12/30/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.