In coverage in the Gazette, a recent Montgomery County report details a difficult trend compounding an already-soft real estate market. Residential properties, especially higher valued homes, are routinely being valued at levels well below the actual market. From the Gazette article:
The analysis studied assessed values of homes compared to actual home sale prices in order to determine if the county was receiving the appropriate revenue and residents were being taxed uniformly.
The Maryland Department of Assessments and Taxation is supposed to set the assessed values at the fair market rates, according to the department’s website.
The new report, however, shows that in comparing assessed values with sales prices, the state is under-assessing the properties, especially the most valuable residential properties.
County Chief Administrative Officer Timothy L. Firestine said he was surprised at the size of the gap at the top end of the market.
Of 19 homes sold in 2009 and 2010 for more than $2 million in the county, the average sale price was $2.68 million, but the average assessed value was $1.86 million, an average under-assessment of $820,000.
To view the report presentation, click here.