Recently, County Executive Rushern Baker released his budget proposal for fiscal 2013. We applaud Baker’s commitment to education and public safety; however, as a representative of the trade association representing over 2,500 Prince George’s County real estate professionals, and the only voice for the homeowners they serve, we as Realtors have grave concerns about this budget’s negative effect on housing.
The FY 2013 county budget proposes a 20 percent increase in the county property transfer recordation fee, raising it $1 per $1,000 in home sale price. That’s an additional $300 in closing costs on a $300,000 home purchase.
Upfront buyer closing costs, including recordation fees, transfer taxes, property taxes, down payments and lender fees, are the largest impediment to homeownership. Much to our dismay, Prince George’s leads the Maryland, D.C. metro area in closing costs. In a statewide comparison, Prince George’s ranks third in closing cost expense, higher than 21 other Maryland counties. Additionally, at 1.4 percent of the closing price, Prince George’s ranks first in the Maryland, D.C. metro area in transfer tax burden.
For another “first,” Prince George’s leads the metro area in property taxes, besting our neighboring jurisdictions Montgomery County and Calvert County by approximately 30 percent and 32 percent respectively. Another disheartening point is that our citizen homeowners disproportionately fund this budget through real estate taxes that provide over 70 percent of county tax revenue.
Home buyers are already struggling to get the necessary capital together to buy homes. This increase lessens their ability to purchase. For sellers, it lessens the pool of ready, willing and able buyers seeking to enter the marketplace.
Unfortunately, the county is experiencing a very challenging housing market. Prince George’s single family property settlements are down 4.1 percent compared to March 2011; condominium settlements are down 5.7 percent compared to March 2011. Property values are at extreme lows compared to prior years, and foreclosures and short sales dominate the market. Real estate traditionally leads the economy out of recession, and we are poised to do that again as our market stabilizes. Increasing housing costs, however, is counterproductive to rebuilding our local economy and a barrier to stabilizing our local real estate market.
We urge Baker to rethink this unwise proposal. We call on all county residents to contact your elected council member to express your concerns on this matter.
Alease Bowles is president of the Prince George’s County Association of Realtors Inc.