BERLIN — Driven largely by significant redevelopment in West Ocean City, properties values in the north end of Worcester County increased substantially in the latest reassessments announced late last week.
The State Department of Assessment and Taxation (SDAT) last week announced the results of a triennial assessment of residential and commercial real estate values across Maryland and the news was particularly good statewide, especially on the Lower Shore in Worcester and Wicomico. Each year, about one third of the residential and commercial properties around the state are reassessed and assigned new values that are used to determine property tax amounts.
Across Maryland, residential properties reassessed saw their values increase by over 8 percent since their last reassessment three years ago in 2016, while commercial properties saw their values increase by about 12 percent. The overall increases statewide for both combined came in at just over 9 percent.
On the shore, the reassessments followed the statewide trend, and actually exceeded the state averages in many cases. Worcester properties are reassessed every three years based on a geographic formula that divides the county into three relatively equal parts. This year, the county’s Group 1, which includes Berlin, West Ocean City, Ocean Pines and other north-end areas such as Bishopville and Showell, for example, were reassessed.
According to the SDAT statistics released last week, the value of residential properties in the area reassessed in Worcester increased from $3.5 billion to $3.7 billion, representing an increase of 6.2 percent. Perhaps more importantly from a property tax standpoint, the value of commercial property, which is not protected by the Homestead Tax Credit, in the area of Worcester reassessed this year increased from $1.1 billion to $1.4 billion, representing an increase of 19 percent.
Combined, the total value of all reassessed properties in Worcester increased from $4.6 billion to $5.1 billion, or a little over 9 percent, which is right around the state average. According to Amy Smith, SDAT Director for Worcester County, the latest reassessments appear to signal a reverse in the trend of stagnant or declining property values in recent years.
“Things have certainly turned around,” she said. “This is the first year every county in the state is showing an increase.”
In Worcester, the 19 percent increase in commercial property values appears to be driven by growth and redevelopment in West Ocean City, especially along the Route 50 corridor and the entrance to Ocean City. Several new hotels have been built or are being built since the last reassessment of the area three years ago and there have been other significant redevelopments of older properties in the area.
For example, a brand-new Park Place Plaza shopping center and retail complex has replaced an aging and somewhat dilapidated old hotel property in the area. In addition, an old building that used to be home to the Ocean City Marlin Club among others is being redeveloped with a brand-new Bad Monkey restaurant. Smith said the growth spurt in West Ocean City helped fuel the significant increase in commercial properties in the reassessed area.
“There is a lot of new construction in West Ocean City,” she said. “We’ve picked up three new hotels there. We saw the values increase in a lot of properties that were redeveloped.”
Commercial growth is only part of the story for the increases in the north end of Worcester reassessed this year. Of the 14,301 residential properties reassessed, 11,882 saw their values increase, representing an increase of 83 percent. Most of the individual property increases reportedly came in around eight to 12 percent depending on location. For example, in Berlin, a one-acre property near downtown increased 10 percent, from $365,400 to $402,100.
The increases seen in Worcester this time around signal a steady upward trend after years of decline. In the boom years from 2006 to 2008, for example, property values in the assessed areas of Worcester increased by 79 percent, 54 percent and 33 percent respectively. When the recession hit in around 2009, the values started a six-year cycle of decline, reaching a nadir of 20 percent in 2010. Since 2015, the values have slowly but surely increased by degrees, but this year’s numbers reflect the biggest gain since the recession.
Over in Wicomico County, the reassessments announced last week showed even larger increases. For example, commercial properties in the section of Wicomico reassessed this year saw their values increase by 31 percent, the biggest gain in commercial property values in the state. Commercial properties in Wicomico saw their values increase from $386 million to $505 million.
Residential properties in the section of Wicomico reassessed this year also saw significant gains. For example, the value of residential properties reassessed increased from $1.37 billion to $1.44 billion, representing an increase of nearly 6 percent. Much of the area reassessed in Wicomico this year falls in Salisbury, leaving Mayor Jake Day bullish about the results announced last week.
“I’m not surprised at the results given the tremendous growth we’ve seen over the past few years,” he said. “The purpose of our constant and tireless efforts to grow the economy in our city is to create value for the families, shop owners and workers of our community.”
Day was quick to point out the significant gains in commercial property values in Wicomico, especially in the Salisbury area, were the highest in the state.
“These significant and dramatic increases in value represent concrete evidence that those efforts are working,” he said. “The vast majority of the properties assessed this year are in our great city and I am delighted to see our hard-working citizens gaining ground faster than anyone else in the state.”
Residential property values in the reassessed area of Wicomico also followed the statewide trend. For example, of the 11,351 residential properties reassessed in Wicomico, 8,863 saw their values increase, or 78 percent. Of the 14,443 total properties reassessed in Wicomico, 8,933 saw their values increase, or 62 percent.
Back in Worcester, the area reassessed in the latest cycle included much of the north end including Berlin, West Ocean City and Ocean Pines, for example. The next area to be reassessed next year includes much of the south end including Snow Hill and Pocomoke, for example. Because of the sheer volume of property tax accounts in Ocean City, almost all of the resort will be reassessed in two years as part of the three-year cycle. However, in the interest of keeping the three assessment areas relatively equal in terms of total accounts, much of the commercial property in Ocean City basically south of 25th Street is splintered off and added to the south-end reassessment area.