Southern Maryland home assessments to plunge, but not taxes
Sunday, December 20, 2009
Property assessments in Southern Maryland are on the decline, but this summer's tax bills are still likely to increase.
That is what the state Department of Assessments and Taxation representatives are saying in the weeks before the official release of property assessments throughout the state.
"It is not that shocking, really," said Susan J. Kopanke, Calvert County's supervisor of assessments, who called this year's assessment the largest correction in the market she has seen in 20 years. "The last time we looked at sales in this area was in 2006 for the 2007 reassessment. And, of course, as you know, the 2006 market was at the height of the market."
Based on data from the Southern Maryland Association of Realtors, Calvert County's existing home sales increased this past year nearly 180 percent. But the average price of homes sold is still lower than the average price in 2006, creating about a 17 percent reduction in assessments. For example, a house worth $350,000 in 2006 would now be worth $290,500.
The midsection of Calvert, where county seat Prince Frederick is, will receive the new assessments, Kopanke said. She said many homes are selling in the $250,000 to $300,000 range in that area. In Huntingtown, homes are being built in the $600,000 range, something Kopanke said she hadn't seen in a long time.
St. Mary's County is similar to Calvert, said Sean Powell, the St. Mary's supervisor of assessments. This year, the area around Charlotte Hall, Avenue and Mechanicsville will receive assessments.
"It is trending down from when we did the assessments three years ago," said Powell, who added that, as in Calvert, homes under $350,000 are beginning to sell.
Existing homes in Charles County also are beginning to sell, but there is still a nearly 30 percent drop in the home values in the existing residential market, according to data from the Southern Maryland Association of Realtors.
Robert C. Farr, Charles's supervisor of assessments, said, "Our analysis is showing a substantial decline in average sale price."
The Waldorf and St. Charles areas, which have many foreclosures and short sales, are getting their assessments this year. Foreclosures are not included in the assessment analysis, Farr said, but those properties have a negative effect on neighboring home values. Charles County is among the five counties with the most foreclosures in Maryland.
Because of massive property value increases in previous years, however, most homeowners will still pay higher tax bills. The homestead tax credit, which caps the annual increase allowed, has meant that many homeowners were never paying taxes on the full assessed value of their properties from 2006. In Calvert, the increase is capped at 10 percent annually. In Charles and St. Mary's, the caps are at 7 and 5 percent, respectively.
For example, Charles residents whose homes doubled in value in 2006 did not pay double. They paid closer to a 21 percent increase over three years. So increases from 2006 will still show up in homeowners' August tax bill and the following bills until the bills catch up to the assessed value.
"Their assessed valuation will be reduced, but their taxable assessment will increase by the amount of the county cap," Farr said.
Because the homestead credit can be used only on a homeowner's primary residence, those with multiple homes will see an adjustment in real time, Powell said.