OCEAN CITY — While property values for Ocean City did increase slightly when the results of the latest reassessments were announced last week, the resort lagged behind much of the rest of the state in terms of gains on the residential side and saw a slight decrease on the commercial side.
The State Department of Assessment and Taxation (SDAT) last week announced the results of the triennial reassessment of residential and commercial real estate values across the Maryland and the news was particularly good statewide. Each year, about one third of the residential and commercial properties around the state are reassessed and assigned new values used to determine property tax amounts.
This year, using the revolving geographic formula that divides Worcester County into three relatively equal parts, all of the residential properties in Ocean City were reassessed, while commercial properties roughly north of 25th Street were reassessed. Because of the sheer volume of commercial properties in Ocean City, the south end is separated and included in another reassessment group in the interest of keeping the process relatively equal.
Statewide, residential properties saw their values increase by an average of 7.5%. In Ocean City, the residential properties reassessed saw their values increase by a modest 3%. Over in Wicomico, the value of residential properties reassessed came in at nearly 12%, or significantly higher than the statewide average. Only Washington County in western Maryland saw an average increase lower than Worcester on the residential side this year.
Perhaps more concerning for Ocean City in the latest round of reassessments was the decline in values for commercial properties in the reassessed area. Those commercial properties in Ocean City reassessed this year saw their values decline by an average of 4%. Worcester County saw the largest percentage decline in the state in the current reassessment year. The only other county that saw a decrease was Somerset. Statewide, commercial properties reassessed saw their values increase by an average of 9.7%. In Wicomico, the commercial properties reassessed increased by an average of 5%.
Statewide, the total average increase of residential and commercial combined was around 8%. In Worcester, more specifically Ocean City, the total average increase of residential and commercial combined was a modest 2%. In Wicomico, the total average increase in residential and commercial combined came in at 10%.
Across Maryland, property values in the reassessed areas increased again, continuing a trend that has last multiple years. Following the recession that began in 2008, reassessed properties saw their values decline for seven straight years before the trend reversed.
“All 23 counties and Baltimore City experienced an increase in residential property values for the third consecutive year, while commercial property values increased in 21 counties and Baltimore City,” said SDAT Director Michael Higgs. “This is a good indicator that the market remains strong and growth is steady here in Maryland.
Worcester has seen its values in the various assessed areas increase for seven straight years after six years of decline. While the combined percentage of increase in Ocean City this year was a modest 2%, the numbers continue to trend in the right direction, according to SDAT Director for Worcester County Amy Smith.
“Positive is always good and we’ve been trending in that direction for a few years now,” she said. “Overall, statewide the increases were lightly lower than the increases we saw in 2019, but 2020 has been a different year.”
Smith said some properties did better than others in the reassessed areas in Ocean City and the SDAT statistics released last week reflect the averages. However, Worcester County saw the lowest number of properties percentage-wise that increased in value.
For example, for the Ocean City residential properties reassessed this year, about 40% saw their values increase. Statewide, 86% saw their values increase, while 98% in Wicomico saw their values increase. Smith said it was uncertain why Ocean City lagged behind the state averages on the residential side.
“There are roughly 31,000 taxable accounts in the area reassessed this year,” she said. “The market has been strong there, but maybe not as strong as other areas, according to the statewide data. Ocean City being a resort town, there are a lot of variables, especially with a pandemic.”
While stopping short of pinning the rather mild increases in residential values and the decreases on the commercial side realized in Worcester in this current cycle on the pandemic, Smith said COVID likely contributed to some degree.
“I really can’t pinpoint a cause for the decline on the commercial side in this area,” she said. “There are certain assumptions we can make, especially on the commercial side with the pandemic. There were restrictions on travel for much of the year, more and more people are shopping online instead of brick-and-mortar, more people are working from home instead of offices and on and on.”
Overall, Smith said she was pleased with the gains in the residential side and not overly concerned with the slight decrease on the commercial side.
“The bottom line is this area had an overall increase, which is a great sign,” she said. “It came in with a combined increase of around 2%. We worked hard this year to ensure everything was finished and the notices went out on time.”