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Posted at 12:45 PM ET, 12/28/2010

Region's housing up; P.G. declines

By Elizabeth Flock

updated Wednesday, 7:25 a.m.

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Homes on Lackawanna Street in College Park. (Photo by Jeffrey Porter/ for The Washington Post)

The Washington region posted the highest year-over-year home price gains in the nation this fall, as real estate values slumped in nearly every other metropolitan area, a key housing report said Tuesday. But sales of aggressively priced foreclosures sparked steep declines in home values in Prince George's County, and Maryland's Charles and Frederick Counties saw small drops in home sale prices as well.

Statewide, Maryland homeowners will see their property values drop an average of 22 percent in the latest round of assessments, the Baltimore Sun reported Tuesday.

One-third of Maryland property owners will receive notices of reassessment, about 740,000 in all. Assessed values dropped on 95 percent of Maryland residential properties compared with their last reassessment in late 2007. State assessors plan to announce the details Tuesday.

Counties with the biggest decreases typically "had the most rapidly rising assessments when the market was very overheated," Robert Young, acting deputy director of the state Department of Assessments and Taxation, told the Sun.

Prince George's County saw the largest drop in this assessment. Its average home value fell 35 percent compared with three years ago, pushed downward by high levels of distressed-property sales. The record drop won't necessarily translate into lower taxes.

Counties such as Anne Arundel and Howard counties also were hard hit.

While Maryland tax assessment notices reflect declines that have occurred over the past three years, the Standard & Poor's/Case-Shiller index released Tuesday shows that price declines in most parts of the country are ongoing among the nation's major metropolitan areas. Six regions hit new annualized lows in October, compared to their September report. Prices are not expected to rebound soon.

However, the Washington area is one of four that posted year-over-year price gains, at 3.7 percent. Los Angeles (3.3 percent), San Diego (3 percent) and San Francisco (2.2 percent) also gained.

See our graphic on mixed Washington's mixed real estate in 2010.

By Elizabeth Flock  | December 28, 2010; 12:45 PM ET
Categories:  DC, Maryland  
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Comments


Real estate and home prices will go down further when the home mortgage interest deduction is repealed and FannieMac is reigned in by Ron Paul and the new congress.

Real estate, in general, is 15% over real value. The only reason to buy real estate in the near future is because it was discounted 15% from list by a distressed seller, and rental income covers all expenses.

Otherwise, real estate is a fools investment.

Short term, financing will become more expensive because lenders will demand a down pay of at least 20% plus coverage for potential future price declines.

Medium term, capital will leave real estate and return to more liquid markets such as equities. Declining real estate values will fuel growth in the Dow.

2011 will be a good year for the Dow (equities) because productivity will increase, labor intensity will decrease, low interest rates will enable stock buy backs (the easiest way to boost a stock's price), the number of IPOs will be small, and M&A will increase as companies with easy access to cheap money use it to buy existing companies.

Bottom line - real estate in general will not be an attractive business until the next bust in the equities market, when capital will exit stocks and return to undervalued real estate.

Current home owners own white elephants.

Posted by: g0tcha | December 28, 2010 2:02 PM | Report abuse


Since MD reassesses every three years, these figures will appear high. Here in VA, reassessments happen every year so the downward trend is more evenly apparent.

My house actually had a small increase in assessed value this year. It will be interesting to see what happens in February.


Posted by: mortified469 | December 28, 2010 2:44 PM | Report abuse

What??? The recod drop in home assessments won't translate into lower taxes." Well when my assessments went up during the housing boom, my taxes sure went up too. So, could someone please tell me, why wouldn't they go down now that the assessment has gone down? How does that work?

Posted by: PracticalIndependent | December 28, 2010 2:49 PM | Report abuse


It seems that "g0tcha" posts once then copies and pastes to all other comment pages.


Posted by: mortified469 | December 28, 2010 2:49 PM | Report abuse

What??? The recod drop in home assessments won't translate into lower taxes." Well when my assessments went up during the housing boom, my taxes sure went up too. So, could someone please tell me, why wouldn't they go down now that the assessment has gone down? How does that work?

Posted by: PracticalIndependent | December 28, 2010 2:50 PM | Report abuse

What??? The recod drop in home assessments won't translate into lower taxes." Well when my assessments went up during the housing boom, my taxes sure went up too. So, could someone please tell me, why wouldn't they go down now that the assessment has gone down? How does that work?

Posted by: PracticalIndependent | December 28, 2010 2:50 PM | Report abuse

It is worth the $300 appraisal fee to get the true current market value of your property then appeal the state and county assessments if their recorded values are too high. I saved $450 a year by doing this.

Posted by: pejochum | December 28, 2010 3:22 PM | Report abuse

Why would anyone in their right mind want to live in PG County? Daaaaaa....PG has the highest crime rate and the lowest rated schools in the state.

Posted by: priveye | December 28, 2010 4:39 PM | Report abuse

Since I have no plans to leave my home until the coroner removes my corpse from it (barring some economic catastrophe that leads to foreclosure), I am not sure that I would mourn a reduction in the assessed value.

It's a small cape cod, vintage about 1953, in central Montgomery, hardly a mansion, but it suits me and my family.

Posted by: paulhume | December 28, 2010 5:24 PM | Report abuse

Here is the unsaid thing. The prices of these homes were way way to high before the bubble burst. They still need to fall a bit further to represent their true value. Yes I know a lot of people suffered at lot of financial hardship (me included) but the situation we had was untenable long term.

Posted by: mrlewish | December 28, 2010 5:56 PM | Report abuse

Why would you want to move to/buy in MD with its runaway taxes and coddling of illegals? Do the Dems think people aren't paying attention?

Posted by: gbooksdc | December 28, 2010 7:34 PM | Report abuse

"The record drop won't necessarily translate into lower taxes."

It would be nice if that statement was elaborated on.

Posted by: vmax02rider | December 28, 2010 9:48 PM | Report abuse


What is the best way to shop for a mortgage refinance? It is a good idea to contact at least three to five lenders for input on mortgage programs and rates. Also search online for "123 Mortgage Refinance" they found me 3.32% refinance rate really fast.

Posted by: arleneellis | December 29, 2010 1:31 AM | Report abuse

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