Appraisal notices on way to Travis County property owners; values reflect 'stabilizing' market
For the first time in years, Travis County homeowners shouldn't face sticker shock when they receive their 2023 appraisal notices.
Notices will be mailed to 434,362 Travis County property owners beginning this week. The notices, which will be sent between mid-April and early May, include the market value assigned to a property as of Jan. 1, as well as the taxable value of that property based on its exemptions.
For 2023, the median market value for all homes is $612,568. That's an increase of about 0.08% over last year's final adjusted median market value of $612,102, the Travis Central Appraisal District said Friday. Based on preliminary numbers, last year's market value was initially reported as $632,208, a 53.6% increase over 2021.
The median market value is the amount for which county appraisers believe a home would sell.
More: What's ahead for the Austin-area housing market? Check out these highlights
Meanwhile, the median taxable value increased 8.9% this year, to $375,978 from $345,286 last year, the appraisal district said. The taxable value (the market value minus exemptions) is used to calculate a homeowner's property tax bill later in the year when the various taxing entities set their rates.
Updated market values will be posted on the Travis Central Appraisal District website at traviscad.org in the coming days.
A homestead exemption is the easiest way for a property owner to lower their property tax bill, said Marya Crigler, chief appraiser for the appraisal district.
“State law protects property owners from seeing drastic increases in their taxable value if they own and live on a property," Crigler said. "For property owners with a homestead exemption, your taxable value can only increase to current market value or by 10% over the prior year, whichever is less.” The deadline to file for an exemption is May 1, she said.
Overall, the Travis County appraisal roll this year increased 13% to $485 billion, led by strength in the industrial, retail, apartment, and hotel sectors, Crigler said. That figure includes an increase of less than 2% in residential properties, a 20% increase in commercial properties and $5.2 billion in new construction.
“The data tells us that the local housing market is stabilizing and returning to a pre-pandemic normal,” Crigler said. “But the retail, hotel, multifamily and industrial sectors continue to see strong growth.”
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How is the Austin-area housing market faring?
Last year ended with the median home-sales price in the Austin-Round Rock region setting an annual record, with half of the homes in calendar 2022 selling for more than $503,000 and half for less.
As the year progressed and mortgage interest rates continued to climb, the Austin-area market saw fewer homes selling, homes taking longer to sell and more sellers lowering asking prices.
Both across the region and within Austin's city limits, home sales have been declining since March 2022 compared with the same months the year before, according to the Austin Board of Realtors. And the median prices for those sales also have been declining since late 2022 year-over-year, the board has said.
More: Home sales plunge; median prices fall in Central Texas housing market
In January, median home-sales prices fell in the city of Austin, Travis County and the Austin-Round Rock metro area. But surrounding Central Texas areas are seeing median prices rise as buyers move further out seeking more attainable housing, Ashley Jackson, president of the Austin Board of Realtors, said in a February news release.
“Outlying areas like Caldwell and Hays counties are the most affordable pockets in Central Texas," Jackson said. "When we have a city like Austin challenged by affordability, the entry point in surrounding areas will slightly increase as people try and find neighborhoods they can afford."
As mortgage interest rates have risen, the slowdown in Central Texas' housing market this past year has led to more leverage for buyers, real estate agents and board officials have said.
In its February report, the board said the Austin-area housing market "is trending in the right direction" as it continues to find its post-pandemic footing. Buyers are continuing to gain more bargaining power, as an increase in the supply of homes has fueled growing confidence among real estate agents and homebuilders, the board said.
More: Home sales, median sold prices topple in Central Texas housing market
In recent months, experts have said that although home sales and the pace of home-price growth have slowed as interest rates have risen, the region's job and population growth point to a positive outlook overall for the Austin-area housing market.
"For those that hope that their tax bills will go down year after year, they unfortunately will be disappointed again this year," Mark Sprague, a longtime local housing market analyst with Independence Title, said in an email Thursday.
Sprague said median home-sales prices have dropped, but only because rates have gone up.
"Every time rates go up 1%, the buyer loses 12% buying power," Sprague said. "Since the first of last summer, the consumer has lost (about 40%) of buying power. The values of local real estate have not gone down, the consumer just can buy less due to the loss of buying power. Therefore ‘median’ values drop."
Sprague continues to say that the region has an undersupply of housing, "meaning demand continues to outstrip supply, driving values up," although not as aggressively as in the past few years, he noted.
"Because of the lack of inventory and housing starts, we continue to see a strong market — not as robust as the last few years — but strong," Sprague said. "With the amount of job creation and lack of inventory, values should maintain. Job creation will continue to drive demand. If you're waiting for values or rates to drop dramatically, based on the current inflation, inventory, demand, etc., you won't see it."
What headwinds loom?
Housing experts say there's evidence the tide of newcomers into the Austin region is slowing. And there could be other headwinds over the next several months as the economy sputters, interest rates continue to climb and affordability challenges persist.
Experts have said sharply rising home prices in recent years have added to affordability concerns and may be causing the metro area to lose some of its appeal. Continuing tech layoffs also could slow the number of people moving in.
"A key concern as we move deeper into 2023 is whether the U.S. economy enters a recession, which would result in additional headwinds for the new home market," Eldon Rude, who has been tracking the Austin-area housing market for more than three decades, said recently. In his 20th annual housing-market forecast in February, Rude said the market has been in a recession since May 2022, when the Federal Reserve's mortgage interest rate hikes aimed at curbing inflation began taking a toll.
More: What's ahead for the Austin-area housing market? Check out these highlights
Said Rude: "In addition to some would-be home buyers being priced out of the market due to higher interest rates, builders will sell fewer homes this year because the pace of in-migration into the region has slowed compared to the torrid pace we saw in late 2020, 2021 and the first half of 2022. Evidence of the slowdown in in-migration include builders reporting fewer relocation buyers in recent months, as well as the sharp slowdown in the absorption in apartments in 2022 compared to 2021."
What's involved in the appraisal protest?
Property owners who believe their property’s market value is incorrect have the right to file a protest with the appraisal district. The deadline to file a protest is May 15, or 30 days after a notice is mailed, whichever is later.
Travis County property owners are encouraged to file their protests through the appraisal district's online portal. Property owners who file there can upload their evidence, review the appraisal district’s evidence and review a settlement offer through their online account. Protests and evidence also will be accepted by mail and in person at the Travis Central Appraisal District's office at 850 East Anderson Lane.
The informal process, which allows property owners to receive a settlement offer from the appraisal district, will begin April 17 and end June 30. During that time, property owners will have a chance to discuss their property with one of the district's appraisers and potentially resolve their protest.
Property owners who do not accept a settlement offer during the informal process will have the opportunity to present their case to the Travis Appraisal Review Board, an independent group of citizens authorized to resolve disputes between taxpayers and the appraisal district. Board hearings are expected to begin in June.
“Property owners who do not receive a notice in the mail are encouraged to review their property on our website to avoid missing the protest deadline,” Crigler said. “Submitting your protest early will give you more time to submit your evidence, schedule an informal meeting and resolve your protest.”
The appraisal district will host a webinar on the protest process at 11:30 a.m. May 3. Registration is available at traviscad.org/webinars.
Property owners can find more information on market values and the protest process on the appraisal district's website, traviscad.org.
This article originally appeared on Austin American-Statesman: Travis County 2023 appraisal notices on way to property owners
