Cecil County Property Values Rise in South County; Home Sellers Benefit, Residents Could Face Higher Tax Bills

The Maryland Department of Assessments and Taxation (MDAT) recently issued new property valuations for one-third of Cecil County, covering southern Cecil County and parts of Elkton in an area designated as “Group 1.” One-third of county properties are re-assessed by the state each year, with all properties re-evaluated over a three-year cycle. The new assessments calculated that residential properties rose in value by 9 percent over their last evaluation three years ago, while commercial property values in the area rose by 11.4 percent in the “Group 1” area.

Gary Duffy, supervisor of assessments for the Cecil County office of MDAT, told Cecil Times that the Group 1 area of the new assessments covers the south county, including Earleville, Cecilton, and Chesapeake City, plus sectors of Elkton south of I-95 and west along Route 40 to near the YMCA property.

Cecil County’s property value rises compared favorably with the statewide average and nearby counties. Statewide, the new assessments rose by 8.2 percent for residential properties and 12.5 percent for commercial properties. In nearby Harford County, home values rose by 6.2 percent while commercial property values rose by just 3 percent. Cecil competes with Harford for new homebuyers and especially for business entities and has had the reputation of a “cheaper” option for both. Cecil County is having a boom in new commercial property development, but most of the growth has been in the western area of the county that will not be reflected in property assessments for another two years.

[Homeowners won’t see the full effect of the new higher property value assessments right away, since increases are phased-in over three years. In Cecil County, annual assessment increases are limited to no more than 4 percent a year, so it would take three years for the full boost to take effect. In addition, owner-occupied residences can qualify for a state Homestead Tax Credit that further limits the impact of higher property assessments.]

Property value assessments are conducted by the state but individuals’ tax bills are a product of the state-set property values plus county-set tax rates. (Residents of incorporated towns also have locally-set tax rates on top of their county tax bills.)

Cecil County’s property tax rate was frozen in the current budget year, at $1.04 per $100 of assessed property value.

But in the previous budget year, County Executive Alan McCarthy took a lot of political heat in his first budget plan for a five-cent increase on the property tax rate, which he said was needed because of his predecessor Tari Moore’s reliance on deficit-funding of her budget without providing adequate revenues to pay for her spending programs. That increase resulted in a home valued at $200,000 having a $100 higher property tax bill.

The new state property assessments cover the least developed areas of the county and likely won’t have a major impact on overall revenue or budget resources when the County Executive drafts his new Fiscal 2020 budget in the next few months.

Becky Anderson. Cecil County’s budget manager, said it was too soon to evaluate how the new assessments might affect the county’s upcoming Fiscal 2020 budget, which will be submitted to the County Council by April 1. Property tax revenues in the current budget year have been running at a lower than expected level so far this year, according to budget estimates presented to the County Council recently. The state is expected to produce new assessment and revenue forecasts for each county in the next few months, Anderson said.

But the new state property valuations are important as an indicator of the county’s overall economic health and, for individual homeowners, may provide a welcome sigh of relief after the uncertainty of the real estate market especially in the aftermath of the property value recession of the last ten years.

Norman Wehner, vice-president of the Cecil County Board of Realtors and president of the Cecil County Landlords Association, told Cecil Times that rising property values in the past year have been a welcome relief for many “reluctant landlords.” Those property owners were forced to rent out their homes after they had to re-locate for jobs but could not sell properties because they owed more on mortgages than they could sell the home for. Such “underwater” properties were a sad but common fallout of the property recession that began in 2008 or so.

“It’s been like a perfect storm” in the past year, said Wehner, who is the broker/owner of Real-Trust Associates. “We didn’t really see it coming,” he said, but recent growth in property values and sales have helped many homeowners sell their properties that had lagged for years on the market. He joked that the market conditions had been bad for his business as a property manager for many reluctant landlords, but that being able to sell those homes now had been good for the realty sales side of his enterprise.

Danielle Ward, president of the Cecil County Board of Realtors, said that the past year showed “a positive direction as far as values” in the home marketplace. She calculated sales price rises of about 7 percent countywide, lower than the state’s value rise for part of the county. She said she did not think that rising property value assessments influenced buyers’ willingness to purchase homes, but the overall trend was for “slow but steady growth” in Cecil County home values.

Joe Zang, branch manager for Coldwell Banker Chesapeake in Chesapeake City, said he had been receiving calls from some clients upset at their new property assessments that were excessively high and did not reflect real values in the marketplace. He said that one key issue has been new assessments on vacant lots in established residential communities in the south county that were much higher than actual recent sales prices.

Some of the new property values are “just absurd,” he said. Zang, who is also the mayor of the town of Cecilton in the south county, said that some property owners have told him they plan to appeal their new assessments to try to get the valuations reduced.