Editor:

As the effects of the current financial collapse become clearer, those who had been in denial are forced to face reality. What was regarded as “the sub-prime problem” has devastated the entire real-estate market, and friends who used to believe that, while condo owners in Florida might have a spot of trouble, southern Maine would be safe are now singing a different tune. The real estate pages are filled with ads marked “New Price,” and any real estate agent will tell you that the market is frozen solid, with buyers afraid to move.

Into what is generally believed to be the worst financial crisis since the Great Depression comes the town of Kennebunkport, in the process of revaluing all its real properties and throwing an added element of chaos into the mix. The timing could hardly be worse. First, many property owners will face substantial increases in their real-estate taxes at a time of widespread financial stress. No phase-in of these hikes is contemplated; a property owner who has been budgeting, say, $4,000 in property taxes may be handed a bill for twice that amount or more. 

But, many will say, assessments need to catch up to the inflated market values of recent years. There’s a logic to that argument, but there is no logic to reassessment when property prices are in free-fall. In a relatively small town like Kennebunkport, the database is small, forcing assessors to reach back to a time when the real-estate bubble was in full force. Assigning “fair market values” to properties today is next to impossible. Indeed, it is just that fact that is confounding the financial community as it struggles to value packaged mortgages and other collateralized debt obligations. 

Yes, revaluation in Kennebunkport was overdue, and there were great inequities in the past. But, as Messrs. Paulson and Bernanke keep telling us, these are exceptional times, calling for exceptional responses.

One possible response, worth consideration, is delaying revaluation until the market turmoil has subsided. The voters have spoken, but what they approved was a budget item, not a timetable for implementation. At the moment, the appraisers, now matter how expert or well intentioned they are, are in an impossible situation: they are being asked to catch a falling knife.

Frederick Van Veen

Kennebunkport