BERLIN — Property values appear to be rising in the state of Maryland, even and perhaps especially in Worcester County.
According to the most recent report released this week by the Maryland Department of Assessments and Taxation, of the 24 counties in the state, Worcester ranks fifth in highest full cash value change for residential properties at 9.9%, behind only Anne Arundel (10.1%), Baltimore (10.9%), Charles (12.1%) and Prince George’s (29.8%) counties.
Worcester’s jump in real residential property value is slightly above the state’s median increase of 9.5% and marks the first real jump in value since the epic market crash of 2008.
On the commercial side, Worcester’s 7% gains don’t fare quite as well as the state’s median gains of 16.1%.
Yet, it should be noted that on the Lower Shore, Worcester’s property values are finally rebounding with much more bounce than neighboring counties like Wicomico, which saw a small increase of about 3% in both residential and commercial properties, while Somerset County continues its downward slide with the state’s most drastic property value declines at 5% and 6% losses, respectively.
The report assessed one third of the state’s two million real property accounts, which equated to 688,440 parcels, all lumped into what the department refers to as “Group 1.” In Worcester, Group 1 is the chunk of Northern Worcester County that includes Berlin and Ocean Pines and Bishopville, but excludes Ocean City and West Ocean City.
‘Added Value’ Found
Last January, the department released its findings on Group 3 statewide, which in Worcester County focused primarily on Ocean City. It showed the first increase in property value in six years, albeit a small one at 2.2%. Yet, put the two reports and the progress in the two groups together, and it could be proof that the comeback is full on.
Worcester County SDAT Director Terri Smith told The Dispatch last January that the 2.2% increase in Ocean City was largely fueled by a spike in value of oceanfront condominiums.
“It’s a modest increase,” she said, “but a gain nonetheless, after the values were heading in the opposite direction for so long.”
That increase resulted in an increase of $182 million in aggregate property value in the county.
Furthermore, this most recent report will certainly be good news to the Worcester County Commissioners, who compensated for a $20 million budget shortfall last year by raising property taxes from 83.5 cents per $100 of assessed value, and raised the Constant Yield Rate to 77.55 cents per $100 of assessed value.
What Does It Mean?
In 2004, Worcester County’s Triennial property values (residential and commercial), as per the SDAT report, started a meteoric rise in value that eventually ended with the well documented catastrophic dive when the market crashed.
After values skyrocketed (cumulatively) a total of 248 percent from 2004-08, revenues plummeted 87% (cumulatively) from 2009 to 2014.
“We will likely never see the numbers that we did in 2004 or 2005,” said Steve Cohen, who is a real estate sales agent Hileman Realty in Ocean Pines. “What this report shows, other than the fact that people’s taxes may go up, is that the market is finally rebounding.”
Additionally, these new assessments are based on the more than 55,000 sales that occurred in Group 1 since 2013, and it’s notable to remember that if you did get an assessment letter in the mail recently, and your property’s value did increase, it will be phased in over the course of the next three years.
However, if your property declined in value, it will be immediately reduced in the first year, and will remain at that assessment until the next three-year cycle comes around.
Cohen believes it’s more of a snapshot or starting point than a total assessment of the market’s improvement.
“Sometimes the assessment reflects fair market value and sometimes it doesn’t,” he said. “You have to ask the question if they are comparing apples to apples. I think the market is improving in this area, but I’m not sure it’s 9 percent. I’d say more like 3 or 4 percent.”
Next year, the department will assess Group 2, which includes predominantly the southern portion of Worcester County, including Snow Hill and Pocomoke but also the booming West Ocean City area.
Cohen doesn’t expect Group 2 to see the rise in value that Group 1 or 3 did. Either way, he believes the increase in property value won’t mean much for anyone looking to buy.
“I think people are going to be focused on price and not the assessed value of properties,” said Cohen. “People are buying more now because they can afford a property and are going to live in it, rather than trying to invest in a property and make money off of it.”