WEST OCEAN CITY – For the first time in at least six years, property values in a large portion of Worcester County including much of West Ocean City have stabilized to levels seen prior to the last big real estate boom and now mirror the average amount of increase in the state.
The most recent reassessment notices hit mailboxes in a large portion of the county this week and many property owners were likely relieved their assessed values have leveled off after several years of soaring increases. The average increase in the assessed area came at just over 11 percent, which is exactly the state average and a far cry from the 70-80 percent increase many saw three years ago.
The area assessed this year included much of the south end of the county along with much of West Ocean City. The State Department of Assessment and Taxation (SDAT) reassesses property values in Worcester on a rotating basis every three years with Ocean City assessed one year, northern Worcester County assessed the next year and the southern end of the county assessed in the third year.
West Ocean City used to be lumped in with the northern section including Ocean Pines and Berlin, but because of increased development and the density of properties in the north end, West Ocean City was splintered off the north county assessment area and lumped in with the southern portion of the county this year.
The realignment was done in an attempt to equalize the three areas in terms of number of accounts reassessed. For example, the old northern section with West Ocean City included totaled nearly 27,000 accounts while the south end came in at around 8,000. Under the new system, the two areas are closer in terms of the number of accounts although the rural southern section is much larger in terms of area.
Property owners in the recently reassessed area saw their values increase by a modest 11 percent, which mirrors the state average for the first time in several years. Because the new assessment is valid for three years, the average amount of increase per year comes in at just under 4 percent per year. The last time around three years ago, many in the assessed area saw their values increase by nearly 80 percent, or around 27 percent per year.
According to Robert Smith, director of SDAT for Worcester County, the 11-percent average increase represents a return to normalcy somewhat for the section of the county reassessed this time around.
“Worcester County has exceeded the state average by far for the last six years, but prior to that, the values in Worcester were equal to or even less than the state average,” he said. “From 2002 to 2006, the average increase was 76 percent, but now it appears we’re back to what we would call a normal level of increase. It took about five years for that to happen.”
Smith said the last big spike in assessments occurred in the late 1980s when values in Worcester increased by around 43 percent. By 1991, the levels had stabilized again to what he called a normal level of increase.
“After that last big increase, it took almost five years to level off,” he said. “That’s what is happening again.”
At an average assessment increase of around 11 percent, the associated property tax increase should be much easier to bear for many property owners this time around. For the sake of simplifying the math, if a $100,000 property saw its three-year assessment increase by 12 percent, the property owner would pay taxes on $104,000 the first year, $108,000 the second year and $112,000 the third year.
“As you can see, these are the types of increases we expect to see over a three-year period,” said Smith. “The last time around, a property owner might see that same $100,000 property go to $125,000 the first year to $150,000 the second year and $175,000 the third year.”