Home values stay up in city

Reassessed property values statewide are nearly flat

December 30, 2008|By Larry Carson | Larry Carson,larry.carson@baltsun.com

Property values in Baltimore are rising faster than anywhere else in Maryland, according to state officials who were to mail more than 730,000 assessment notices today.

While appraisals were nearly flat statewide for property overall - and even dipped in the more prosperous suburbs - values for homes in the third of Baltimore that will receive the notices rose 21.4 percent since their last assessment in 2005.

State assessors said home values rose 9.7 percent in eastern Baltimore County, 5 percent along the U.S. 40 corridor in Harford County, and 2 percent in the reassessed area of Carroll County. Home values dropped 4.2 percent in Anne Arundel, 7 percent in Howard and 16.3 percent in Montgomery County.

State assessment officials said that higher demand for relatively low-priced houses has driven average values up in some areas.

"Most of the increase you're looking at is in moderately priced properties," said Owen C. Charles, assessment supervisor for Baltimore. A house in South Baltimore that might have sold for $75,000 in 2005 can cost $150,000 now, he said, while decreases in prosperous Howard or Montgomery counties reflect larger drops for higher-priced homes.

Daraius Irani, director of applied economics at RESI, the economic forecasting arm of Towson University, said the new figures show that the Baltimore area has some stability.

"I think it does offer some hope" in an economy rife with bad news, he said.

"It doesn't mean you go out and leverage yourself to the hilt to buy a home, but it shows there is a strong point in our local economy," Irani said.

Last year, assessed values were up an average of 25 percent through a swath of Baltimore's midsection. The city's new assessment area includes South Baltimore and some waterfront areas such as Fells Point.

"In South Baltimore, people are coming to take a chance," said Ian Brennan, a spokesman for Mayor Sheila Dixon. "We have reason to be cautiously optimistic about the long-term strength of the housing market in Baltimore."

The state is to mail out 731,611 assessment notices today. State assessors re-examine one third of each jurisdiction each year, and phase in the new values over a three-year period. Local governments set property tax rates each spring based on those values.

Because of the huge home price increases earlier in the decade, most taxpayers will still see increases in their tax bills as they slowly catch up due to the state's Homestead Tax Credit Program. For owner-occupied homes, the program means that only a small percentage of a home's increased value might be taxed each year.

Still, veteran tax-policy critics Harold Lloyd and David Boyd, both Baltimore County residents, said homeowners should appeal their new assessments if they feel the value is wrong.

"There's too much opportunity for errors to occur. It's a system left to interpretation and very subjective," Lloyd said.

"The whole thing is skewed in favor of the Department of Assessments and Taxation," Boyd said.

Don Beynon, Harford County's assessment supervisor, said it is important for those expecting large drops in their assessments to remember that the property reassessed this year was last revalued in 2005.

"In that period of three years, you had 2006, with prices still rising, 2007 when they were flat, and then they deteriorated in 2008," he said.

The annual increase in values for all reassessed properties statewide was 0.3 percent, but commercial property values showed robust growth. Residential prices statewide dropped 3.4 percent, while commercial values rose 17.5 percent, according to figures from the Department of Assessments and Taxation.

"We certainly see that there are these regions of the state where we still have a strong market," said C. John Sullivan, the department's director.

Henry J. Sikorski, state supervisor of assessments, said changes in commercial values are coming more slowly than those for homes.

"The commercial market is slowing down, but it has remained healthy. We have not seen a real downturn," he said.

Despite slower sales and poor economic news generally, Sullivan said that prices are still rising in areas with modestly priced homes, pointing to rising values in eastern Baltimore County, economically struggling Allegany County, and Prince George's County, where foreclosures have been a major issue.

In Baltimore County, values for all property rose an average of 4.4 percent in the eastern third of the county - stretching from Dundalk and Essex north to Perry Hall. Prices were higher especially in Dundalk, officials said, while falling off in higher-priced areas.

Don Mohler, a spokesman for County Executive James T. Smith Jr., said the county's efforts to demolish blighted apartments and spur a rebirth on the east side are paying off.

"In eastern Baltimore County there's a large supply of work-force housing for families, like teachers, construction workers and nurses. We're not surprised," he said.

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