Owners within the Austin space can count on valuation and tax burdens to rise

When Travis County homeowners receive the 2021 home valuation notifications for their home in the coming weeks, they will be facing the double-edged sword that is Austin’s housing market.

Their properties are increasing in value – which can be great if you are selling your home or planning to do so in the near future.

But if you stay tuned, those rising numbers will dip the other way. Property tax bills are increasing by hundreds or even thousands of dollars every year – and that’s a scenario that is unlikely to change anytime soon.

The Travis Central Appraisal District began sending valuation notifications to 389,530 property owners this week. The notices include the property’s market value based on its January 1 status and the property’s taxable value based on its exemptions – and all of those numbers are growing rapidly.

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The median market value for all homes in Travis County – the amount a home could potentially be sold for – rose 16.6% year over year, rising from $ 354,622 to $ 413,403, according to preliminary figures from the Travis Central Appraisal District.

The median taxable value – the amount a homeowner pays tax on – increased 9.1% from $ 279,520 a year ago to $ 304,832. Cities, counties, school districts, and other local tax authorities use this value to set property tax bills for 2020 later in the year.

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Overall, Travis County’s valuation list rose 12% to $ 322.9 billion, led by a more than $ 3.9 billion increase in residential real estate, said Marya Crigler, chief appraiser for the Travis Central Appraisal District.

“In my 30 years in the rating district, I’ve never seen data showing house prices like this,” said Crigler. “The data shows us that property prices are rising as the local property market continues to be constrained by limited supply and overwhelming demand.”

Under Texas law, the taxable value of a homeowner’s primary residence cannot increase more than 10% per year. However, as market values ​​continue to rise rapidly, many homeowners have the prospect of being affected by the 10% annual increase in taxable values ​​and the accompanying increase in their property tax bill for several years.

This only adds to the persistent affordability problems in the region, as soaring property prices have risen faster than the incomes of many residents and large parts of the population are being driven out of the market, experts say.

The median taxable value - the value a homeowner pays tax on - for homes in Travis County rose 9.1% from $ 279,520 a year ago to $ 304,832, according to preliminary figures from the Travis Central Appraisal District.

Austin Area “Not Building Enough New Homes”

Charles Heimsath, a real estate advisor in the Austin market for several decades, said he was “not at all surprised” by the rise in residential real estate market values ​​in 2021.

“The simple fact is that we are not building enough new homes,” Heimsath said. “The combination of land, labor and material shortages with excessive regulation makes it difficult to provide new housing in an affordable and timely manner.”

For years, this imbalance has been driving prices up in the five-person Austin metropolitan area, which stretches from Georgetown to San Marcos.

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In March, the average price of homes sold in both the city of Austin and the greater Austin area broke records, the Austin Board of Realtors said. The average price for a home across the region rose 28.8% from last March to a record $ 425,000. Within the Austin city limits, the median sales price rose 24.8% last month to $ 514,000 – a high for every month recorded for Austin.

“The reality is that homes in the Austin area are more expensive than ever,” said Vaike O’Grady, Austin regional director for Zonda (formerly Metrostudy) who tracks the real estate market. “Much of this is due to heavy resettlement activity, especially from high-priced and highly taxed coastal areas. Californians don’t have sticker shock, only locals.”

O’Grady said property prices are expected to continue to rise as it takes longer to bring newly developed plots to market.

“Until we see an increase in lot shipments and significantly more resale offers, we will remain in a very hot sellers’ market,” said O’Grady.

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Houses on Simond Avenue in the Mueller neighborhood on Monday April 12, 2021.

Past Travis County data dispute

For some Travis County residents, the 2021 home valuation will also end a one-year deadline for the taxable value of their homes to increase, caused in part by a dispute between the Travis Central Appraisal District and the Austin Board of Realtors over access to data Related to home sales.

For the previous valuation year, Crigler took the unusual step of not setting new values ​​for most properties as of January 1, 2020, and led a dispute with the Austin Board of Realtors over their “unauthorized exploitation” of their private properties for data, including home sale prices.

As a result, Crigler did not have enough data to set new values ​​for most of the homes in the county. Crigler said she still plans to evaluate the new home and increase the values ​​for houses whose value has not risen to market value due to a homestead exemption.

When notices were published last spring, nearly 70% of homeowners saw little or no increase in their market or taxable assets, and some saw decreases.

In 2019, the Austin Board of Realtors filed an injunction to prevent the evaluation district from using the board’s data. The district had purchased the information from a vendor who operates the Austin Board of Realtors’ MLS database for house buying and selling. The database contains property descriptions and photos of houses offered for sale, as well as sales prices.

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The board said Crigler could still do her job by getting the information differently, as other rating districts across the state have said. Texas is one of about a dozen states that do not require disclosure of real estate transaction data.

This year, Crigler said, her office “identified a new source that would provide us with the data we need to evaluate properties and comply with the letter of inquiry sent to us by the Austin Board of Realtors.”

In October, the board of directors of the appraisal district approved a contract with Carahsoft Technology Corp. via an “extended real estate report” created by TransUnion. The report is a proprietary product owned and sold by Carahsoft / TransUnion and, as such, does not violate the cease and desist letter, Crigler said.

“This report, combined with data from alternative sources such as certificates, sales questionnaires and protests, has enabled us to recalibrate our models in 2021,” said Crigler.

The first report is $ 201,788, and the estimated cost of each periodic quarterly report is $ 25,000, according to the minutes of the October evaluation district meeting.

Travis County real estate values

Average Taxable Values ​​for Residential Homes in Travis County for 2021.

Tax authority median value (percentage increase)

Austin ISD $ 384,818 (+ 10.1%)

Del Valle ISD $ 186,324 (16.2%)

Eanes ISD $ 924,332 (8.2%)

Elgin ISD $ 167,164 (+ 9.6%)

Lago Vista ISD $ 208,351 (+ 4%)

Lake Travis ISD $ 393,254 (+ 10.3%)

Leander ISD $ 486,060 (+ 9.9%)

Manor ISD $ 218,346 (+ 11.6%)

Marble Falls ISD $ 426,440 (+ 9.1%)

Pflugerville ISD $ 259,077 (+ 11.2%)

Round Rock ISD $ 450,383 (+ 9.8%)

Travis County USD 304,832 (+ 9.1%)