Property assessments plummet

99 percent are down

Friday, Jan. 1, 2010

Charles County has the sober distinction of topping the state reassessment lists for highest percentage of homes that have lost value and the largest percentage drop in estimated price since 2007.

Numbers released by the Maryland Department of Assessments and Taxation Wednesday show county residential property lost $1.7 billion in value as a result of a 28.2 percent plummet in estimated home value, and only six of the 18,344 homes in the county were estimated to have increased in value.

The average full cash value change for the state was minus 19.7 percent. The average percentage of residential properties that decreased in value across 24 counties is 93.35.

According to state figures, 99.97 percent of the total number of residential improved properties in Charles County decreased in value. Only Frederick and Washington counties shared decreases to more than 99 percent of homes with Charles County. Frederick County had a 26.1 percent full cash value loss while Washington County had a 22 percent decrease.

In Calvert and St. Mary's counties, 98.54 percent and 95.97 percent of the total homes decreased in value, respectively.

Including commercial properties, the portion of Charles County assessed this year decreased in value by 92.68 percent.

Only seven of the other 23 counties had a higher total percentage drop, Frederick County being the highest at 96.46 percent.

There was a 6.3 percent boost in Charles County's commercial cash value but it will only generate $122 million, county officials said.

"I don't think we're really all that surprised that assessments are down. We're homeowners like everyone else and this is not news we wanted to hear," said Commissioner Reuben B. Collins II (D). "Clearly this is a reflection of the economy … and the real estate market being affected by the recession."

Maryland residential and commercial properties are reassessed every three years. Assessment notices were mailed this week to a third of Charles County — primarily the St. Charles and Waldorf neighborhoods — and a total of 673,221 were mailed to property owners statewide.

A letter from the assessments department said this was "the largest decrease in real estate values for residential properties in the history of the [department]."

More than 90 percent of the two dozen counties saw a drop in their residential assessments, the letter continued.

Like Collins, Deputy Director of the Assessment and Taxation Department Robert Young does not consider the depressing numbers a shock.

The last time this group of homes and businesses was assessed was in 2006, at the height of the real estate boom, Young said.

In 2006 the full cash value went up 70.2 percent, which meant that over the course of the years leading up to that assessment, there was a 23.4 percent increase, compared to the nearly 20 percent total loss today.

"That's the market of your own particular county." Young said. "It's interesting to see what those numbers show us."

What those numbers show, said Tom Earnest of the Waldorf Century 21 office, is actually the real estate market self-adjusting from a peak where it shouldn't have found itself three years ago.

"I don't think anybody expected real estate prices to jump the way they did. No one ever expected their homes to be worth [so much]," Earnest said. "I think … prices are getting back to where they should be. The pendulum had swung too far out and now it's swinging to the other side.

"Prices may be lower than where they ought to be, but homeowners should look at this as the market correcting itself. Maybe they don't want to hear that, but that's the reality of the market."

As for any silver lining that can be found among the dire news is the hope that at rock bottom, the only way to go is up.

Kelley Rollins, a realtor with RE/MAX in White Plains, said that all that's left to do now is to wait for home values to eventually rise again.

But waiting for a bounce back might not be the only thing the county has to manage over the coming months.

In the spring, the county commissioners drew criticism from residents after the board voted to keep the county's property tax rate at $1.026 per $100 of assessed value and the personal property tax rate of $2.405 per $100 on business real estate and inventory.

The real property tax rate would have needed to drop to 96.4 cents per $100 of assessed value to offset the increased assessments.

Now, not only are residents struggling with a pinched economy, but their home values are suffering through no fault of their own.

Young suggested homeowners focus on taking advantage of the homestead tax credit which for Charles County is capped at 7 percent, meaning property taxes can rise no more than that amount.

Young said 1.4 million out of 1.5 million residential property owners in Maryland receive a homestead tax credit.

Calvert County has a 10 percent cap and St. Mary's has its cap set at 5 percent.

"What people really need to do is look at last year's tax bill and how big the homestead [credit] is," Young said. "[They] don't … appreciate how much it saves them."

The credit prevents homes from following the market rate and requiring owners to foot that full amount for the tax bill.

While that might be an advantage when values are high, that seven percent cap remains even when a home's worth takes a dive.

For more information go to www.dat.state.md.us.

msomers@somdnews.com