For the most part, I always assume one of two things about TCAD Valuations: 1. That the values are purposefully absurd to get property tax paying homeowners to figure out and justify what the real values are on behalf of the Travis County Appraisal District, and/or 2. The people tasked with assessing property values have not recently sold a home or helped someone to sell a home in the area that they’re assessing.
This year’s valuations at Mueller for people in the below $500,000 price range have generally increased around 10% over the 2010 values, and an unusual thing is happening in the neighborhood – owners are not just complaining that TCAD valuations are wrong, they’re undervaluing their homes. Most homeowners believe their homes are worth more than they actually are, but I’m not seeing this right now.
If we take a few examples of recent sales, it might be that the increases in property values are consistent with the market. I’ve already talked recently about low inventory and home listings at Mueller receiving multiple offers in the first few days on market. Let’s look at some numbers for two particular sales. Texas is a non-disclosure state, so I can only reveal sales price data to clients, so I’ll assume that homes have been selling for full list price – not unreasonable in a multiple offer situation in low inventory.
Meritage 1902 plan – 3 bed, 3 bath plan approximately 2001 sqft. A resale comparable was on the market in October 2010 listed at $338,800. Another plan under contract at a list price of $385,900 in April 2011 – 6 months later for 13.9% more. Sure, there may be different upgrades and features in each house, but nothing that significant.
Saldana Hickory plan – 3 bed, 2.5 bath home approximately 2074sqft in Garden Court 2. Sold new in August 2009 listed at $328,000, resold in April 2011 at a listing price of $355,000 an increase of 8.2% for a resale home 20 months after purchase.
These are a few examples of how pricing has increased dramatically since last year. Sounds like a bubble waiting to burst – though maybe there are some fundamentals that are driving the increase – more of that in another post.
A big caveat. The TCAD valuations for 2011 are supposed to be the value at 1/1/2011. The sales at the end of 2010 didn’t support a huge rise in values – the most obvious being the David Weekley Mansfield plan that my clients closed on right at the end of December 2010. Any rapid increase in prices have been in the spring of 2011.
Of course what my neighhors have been saying is that their mileage using a comparable sales approach has varied depending on which appraiser they had at their TCAD hearings. In my opinion, the appraised value should be a repeatable, defensible number that can easily be explained. If taxpayers are leaving their hearings feeling that it also depends on the appraiser and their mood, then the process is not working very well.
Garreth Wilcock is a disgruntled property tax paying Realtor living in a David Weekley yard home in Mueller Austin. Get in touch if you need help protesting your taxes. 512.215.4785