Property values drop 14.9 percent in Worcester County

(Jan. 7, 2011) Though residential property values across the state saw the largest decrease in recorded history in this latest round of reassessments, properties in Worcester County that were reassessed going into this year saw a smaller decrease than the state average.

New assessments notices were sent out last week to around 20,000 properties in the southern end of the county. Properties are reassessed every three years and this cycle included commercial and residential properties in the Snow Hill and Pocomoke areas, along with a third of all the residential properties in the state.

In Worcester County’s reassessed section, property values decreased by 14.9 percent on average. Residential properties saw an average decrease of around 22 percent while commercial properties saw smaller decreases, leading to the average.

This is compared with a 22-percent average decrease in property values recorded statewide. Of the 739,764 properties that were reassessed in the state, more than 95 percent of those saw their value decline, according to the Maryland Department of Assessments and Taxation. This was the largest decrease in real estate values for residential properties in the history of the department.

“These changes take place because of what people are willing to buy and sell a property for,” said Worcester County Supervisor of Assessments Robert Smith. Since these properties were last assessed in 2007, real estate sale prices have plunged, leading to the decline in assessments. “We found assessments followed the same trend as the market.”

Smith said house prices in the south end of the county, where half the homes are owner-occupied, are relatively stable and do not tend to see the dramatic cycle of highs and lows experienced in Ocean City.

For that reason, the property values do not fluctuate as much as those in the resort when the real estate market changes. Ocean City will be reassessed at the end of 2011, and the northern end of the county including Berlin and Ocean Pines will be done at the end of 2012.

The comparatively modest reduction in assessments for Worcester County did not surprise local assessors, because of the stability of house prices when compared to other areas. But Smith said people living in other areas of the state who own second homes in southern Worcester County might have been shocked by how small the reduction was compared to their home counties.

“It might have been a big surprise if you don’t live here, because people who live in Baltimore or Washington counties might have seen their assessments go down 30 percent,” he said.

The 14.9 percent decline in property values will affect the government and its upcoming budget, because the county will collect less tax revenue at the same tax rate. Smith was unable to place a dollar figure on the expected decrease in revenues because the period to appeal the assessments is only just beginning.

The overall figure will change until all the appeals are completed. He did, however, say the county will have to make some tough choices to account for the drop in property tax revenues.

“They’re going to have to make some hard decisions,” Smith said of the county commissioners. “If they decide they need the same dollars of revenue as last year, they’re going to have to look at things to cut or look at the tax rate. We’re hoping this doesn’t affect them too greatly because they were planning for this.”