New property assessments in Maryland show that real estate values are continuing their steady rise from the doldrums of deep recession earlier this decade, according to state officials who say the trend is affecting old and new neighborhoods alike.
State officials say their most recent evaluation shows that commercial and residential property values statewide have risen an average of 5.7 percent over the past three years. The rise is the largest since 1992, when the real estate market dipped into recession after widespread land speculation inflated property values in the late 1980s.
In Washington's Maryland suburbs, assessments for Montgomery County neighborhoods climbed an average of 6.4 percent over the past three years while property values in Prince George's County rose 1.9 percent, the smallest increase in the state.
Howard and Anne Arundel counties posted average increases of 6.6 percent and 8.7 percent for the three-year period, respectively.
The three Southern Maryland counties, struggling to manage rapid residential growth, posted smaller increases. Calvert County property values rose about 6 percent; St. Mary's, 4.2 percent; and Charles County, 3.6 percent.
"We don't really have one real estate market in Maryland," said Ronald W. Wineholt, director of the state Department of Assessments and Taxation. "We have dozens throughout the state, some of which are stronger than others."
Maryland appraises one-third of the property in the state each year, taking into account changing market conditions and development patterns that affect land values. The new evaluation, along with local property tax rates, determines the size of annual property tax bills. Any change in assessment is phased in evenly over the three-year period.
State officials sent notices to more than 660,000 property owners this week with the new assessments. Officials in Virginia and the District plan to mail notices in the next few months.
Maryland officials and real estate agents called the changes consistent with the trend of slightly rising values for commercial and residential property in recent years. But some local government officials said they were surprised that property values are not rising faster, given the amount of activity in the real estate market.
Robert Kendal, Montgomery's budget director, said he is projecting a 28 percent increase this year over the annual average this decade in the amount of revenue the county collects from property transfers and recordations. That revenue is tied directly to the number of properties that change hands in a given year.
"With these transfers happening, why isn't there more pressure on the price of housing?" Kendal said. "One would think there would be building pressure."
Part of the explanation is a booming construction market that continues to feed housing demand with a steady supply of new construction, county officials said. The supply for commercial development is not increasing at the same rate, however, leading to far larger increases in the value of commercial property.
In Montgomery, 66 percent of commercial parcels assessed this year increased in value by more than 5 percent. Only 16 percent of Montgomery's residential property rose that much. Wineholt called the strength of the commercial market "pretty dramatic."
Across the Potomac River, Fairfax County has experienced a similar trend. Residential property values on average rose slightly this year. But commercial property jumped 9.5 percent.
In Maryland, almost all the property reassessed in Prince George's this year was inside the Capital Beltway--a crescent east of the District border from roughly Landover to Capitol Heights. Montgomery County's neighborhoods included Rockville, Gaithersburg and others along the county's northern and eastern borders.
A mix of old and new neighborhoods south and west of Annapolis were assessed in Anne Arundel, where property values jumped 8.7 percent, among the five highest in the state. In Howard, established neighborhoods in Ellicott City, East Columbia and Elkridge were evaluated this year at an average increase of 6.6 percent.
Staff writer Stephen C. Fehr contributed to this report.