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County home valuation inceased 70 percent 3 yrs { January 6 2005 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A51760-2005Jan5.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A51760-2005Jan5.html
Md. Home Valuations Increase Sharply
D.C., Va. Expecting Double-Digit Jump
By Tim Craig
Washington Post Staff Writer
Thursday, January 6, 2005; Page A01
Home assessments in Montgomery County have risen nearly 70 percent in the past three years, according to state officials, driven by a hot real estate market that is likely to keep producing steep increases across the Washington region.
"It is unprecedented growth," said James K. Kneussel, outgoing president of the Greater Capital Area Association of Realtors. Although 2005 assessments in the District and Virginia are incomplete, officials in those jurisdictions say homeowners should expect increases similar to those in Maryland.
The jump in assessments won't immediately trigger massive property tax increases for Marylanders. Under state law, local governments must limit yearly increases to 10 percent. In the District, taxes on owner-occupied homes are capped at 12 percent annually. Virginia has no cap.
Properties in Maryland are assessed by the state on a three-year cycle. The portions of Montgomery revalued this year include communities among the region's priciest -- Potomac, Bethesda and Chevy Chase -- as well as Wheaton and Olney. It means that a typical home in one of those communities worth $400,000 in 2002 is now, at least for tax purposes, valued at about $679,000.
Montgomery's increase was the highest of any Maryland county. But officials said homeowners across the state should expect double-digit increases when they receive their assessment notices this week. State figures show an average 46.6 percent increase over three years for all assessed properties.
When commercial and residential properties are combined, Montgomery had an average increase of 65 percent, which state and local officials say is the largest three-year increase they can recall.
Among other Maryland counties in the Washington region, Frederick received the second-highest revaluation (56 percent), followed by Calvert (50.4), Howard (48.5), Anne Arundel (47.6), Charles (47.2), Prince George's (40.1) and St. Mary's (37.2).
"I don't think it should surprise anybody," said Bill Stansbury, supervisor of assessments for the Maryland Department of Assessments and Taxation, which mailed notices to nearly 700,000 state residents. "I think it has been pretty well publicized nationally that home values, home prices, have been extremely high."
Annual assessment increases in the District are expected to be in the 15 to 20 percent range based on revaluations completed so far, according to Tom Branham, the city's chief assessor. He said officials will not complete their survey until the end of this month. Notices will be mailed in March.
"If you take 15 to 20 percent increases on an annual basis and roll it into a three-year assessment cycle like Maryland's, then the increases are comparable," Branham said.
In Virginia, where properties are reassessed on an annual basis, officials said they also see no slowdown in the real estate market. Last year was the fourth year in a row that Fairfax County homeowners have seen their home assessments rise by double digits, including 14.2 percent in the Falls Church area. Valuations rose 17.2 percent in Arlington and 16.9 percent in Alexandria in 2004. Assessment notices will be mailed to Northern Virginia property owners over the next few months.
While the increases demonstrate real estate's value as a long-term investment, the higher assessments also translate into burdensome increases in property tax bills. And rising property values price a growing number of middle-income families out of the real estate market, forcing them to drive long distances in search of an affordable home.
"This is a symptom of our success," said Derick Berlage, chairman of the Montgomery County Planning Board. "The area remains an attractive place to live and an attractive place to do business. Businesses are moving here, and people are moving here, and demand is going up faster than the supply of housing, so it is pretty much Economics 101."
Maryland's rise in valuations was fueled in part by buyers' willingness to pay increasingly high prices for high-end properties, such as vacation homes in Deep Creek Lake and mansions along the Chesapeake Bay. In the latest assessments, some homes in Montgomery doubled in value over three years, said Dan Gilbert, supervisor of assessments for the county. As of six months ago, the median price in Montgomery was $357,200 for new homes and resales. The median price for a newly built, detached single-family home was $648,000.
Property values in the county grew rapidly in the late 1980s, but they sputtered during the recession of the early 1990s. Since then, they have grown steadily, reaching an average of 51 percent for the three years covered by last year's reassessment.
"For the past four years, people have said, 'It's going to slow down,' " Kneussel said. "And every year, it's gotten better."
Rising property values in the Washington region were highlighted in a survey released last month by the National Association of Home Builders.
It found that a police officer, teacher or nurse making the median salary for those professions can afford a median-priced home in only 37 percent of the region's census tracts. Retail workers can afford to buy in less than 1 percent of census tracts.
"There is an extreme challenge for those at the lower end," said Robert J. Reid, president of the Center for Housing Policy. "Their choice is: Live as far out as West Virginia and drive three hours to work, or live in a more undesirable community."
Staff writers Amit R. Paley and Yolanda Woodlee contributed to this report.
© 2005 The Washington Post Company
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