Property values fell across Maryland in 2011, with homes in Prince George’s County plummeting 36.5 percent, the worst decline in the state and the worst drop in the county in the last five years.
By comparison, Montgomery County houses lost about 12.7 percent of their value last year, declining slightly less than the state average of 17.1 percent.
Because properties are assessed every three years — with one-third of the houses in the counties assessed each year — the most recent assessments were the properties’ second since the recession began. For most places, that meant smaller drops in value.
| Change in home values | |||||
| 2007 | 2008 | 2009 | 2010 | 2011 | |
| Montgomery | 14.6% | -16.3% | -19.4% | -17.4% | -12.7% |
| Prince George’s | 48.9% | 6.7% | -26.7% | -35% | -36.5% |
| Maryland average | 32.5% | -3.4% | -19.7% | -21.9% | -17.1% |
| Source: Maryland State Department of Assessments and Taxation | |||||
But the plunge in Prince George’s County is not surprising, because about 80 percent of home sales last year were foreclosures or short sales, said Robert Young, director of the Maryland State Department of Assessment and Taxation.
Prince George’s is still at the bottom of the market cycle, said John McClain, deputy director of George Mason University’s Center for Regional Analysis. The county can expect the housing market to begin stabilizing when the foreclosure process has finished.
Montgomery County’s housing market, however, is beginning to stabilize, which is why the county saw a smaller decline in 2011 than the year before, he said. “Recovery has begun in some parts of the county, but not all parts of the county.”
Some houses in Montgomery County lost more than 20 percent of their value while others gained 5 percent, said Marie Green, supervisor of assessments for the county. Still others remained flat.
Despite declining home values, residents may not see much of a decrease in their tax bills this year, and some may even see an increase, Young said.
Because the state’s homestead tax credit limits the amount that the taxable portion of a resident’s property can increase each year, longtime residents have been paying taxes only on a small fraction of the assessed value of their homes.
For example, Prince George’s County Supervisor of Assessments Joseph Hensley described a man whose house was valued at $430,000 in 2008 but has since dropped to $380,000. Since he was taxed on less than $200,000 last year as a result of the tax credit, though, his taxable assessment value will continue to rise until it catches up with his full assessed home value.
Prince George’s will hold its tax rate at 96 cents per $100 of property value, according to Thomas Himler, the county’s deputy chief administrator for budget, finance and administration.
Montgomery County Executive Ike Leggett has not announced whether he intends to raise the tax rate in fiscal 2013, said Joe Beach, director of the county’s Department of Finance. A fiscal plan presented in December, however, assumed that the county would stay at the legal limit, which assumes a 3.3-percent increase in the portion of the county’s revenue that comes from property taxes.
