ROCKLAND — Skyrocketing housing prices may lead the city to undertake another revaluation of properties.

Assessor Kerry Leichtman is scheduled to make a presentation to the Rockland City Council at its Monday, Dec. 19 meeting that starts at 5:30 p.m.

City Manager Tom Luttrell has pointed out if the city’s assessments of properties falls below 90 percent of market value, homeowners will not get the full amount of homestead or veteran exemptions that they are entitled by state law.

The city last adjusted assessments across the community in 2020. The 2020 modified revaluation — done by exterior inspections, reviewing of city building permits, and market analyses by KRT Appraisal — resulted in South End properties facing the steepest hikes, with 50 to nearly 100 percent increases in assessments common. That led to steep tax hikes for those that saw the steepest valuation increases.

Since then sale prices of homes have risen dramatically throughout the city. In Knox County, the median price of single-family homes rose 72 percent from $247,000 in 2020 to $425,000 in 2022.

Recent home sales in Rockland continue to show prices are dramatically more than the assessed value placed on the property by the city. For example, on Nov. 29 a mobile home on a three-quarter acre lot on Hilltop Lane in Rockland sold for $264,900. The city has the property assessed at $110,900. A home on Waldo Avenue assessed by the city at $582,200 sold last month for $1,020,000.

The Maine Constitution says that property shall be assessed at its “just value.” The state points out that courts interpreted “just value” to mean fair market value, or in other words, “what the property is worth.” A property’s worth is commonly looked at as “what a willing buyer would pay a willing seller” for a particular piece of property.

The city manager said if the Council agrees that a revaluation should be conducted, the process will take about two years. The city will seek proposals from outside firms that would conduct the revaluation. He estimated the cost at between $200,000 and $300,000.

The last full revaluation in Rockland was done in 2005 when the city hired Vision Appraisal. That revaluation included interior inspections of properties as well as exterior viewings and market analyses.

The neighborhoods that felt the brunt of those increases were Dodge Mountain, Bog Road, Waldo Avenue and Samoset Road. Those homes saw their valuations skyrocket 50 to 100 percent percent. The 2005 revaluation was the first full revaluation Rockland did in 29 years.

The revaluation itself does not increase property taxes on a property but may distribute the tax commitment. Properties whose values increase more than the citywide average would see increased taxes. Those properties that increase less than the city average could see a reduction in taxes.

The general rule of thumb is that one third of properties will pay more in taxes after the valuations are changed, one third will see little change, and one third will pay less.

In each revaluation, there is often an outcry from residents who see the sharpest increases.