Home » Travis County median home value jumps to $632,000 — a $200,000 increase over 2021 – Austin American-Statesman

Travis County median home value jumps to $632,000 — a $200,000 increase over 2021 – Austin American-Statesman

by Arifa Rana

New appraised home values are out in Travis County, and it won’t surprise anyone who has been tracking the area’s sizzling real estate market to learn they leaped dramatically over last year.
The median market value for all homes — the amount for which the county thinks a home would sell — rose to $632,208, a 53.6% jump over last year’s value of $411,658. The median market value has risen 78% since 2020.
The drastic increase in appraised market values is in part because the county’s appraisal district says evaluations in past years were lower than they should have been. 
The median taxable value — the value used to calculate a homeowner’s property tax bill — rose to $338,344, up 11% from $304,596 last year, the appraisal district said.
Related: Median home price soars past $520,000 in Austin area’s tight housing market
No matter how much the appraised market value of a home rises, under state law the taxable value of an existing home with a homestead exemption can’t increase by more than 10% per year. 
The jump in values is good news for homeowners who have built up equity and are looking to sell and leave the area — but not so good for those who plan to stick around and will see their property tax bills continue to rise.
Appraisal notices are being mailed to Travis County’s 400,578 residential and commercial property owners. They reflect the property’s value on Jan. 1. The appraisals are already posted online at traviscad.org. The site crashed Friday due to a rush of visitors in what the appraisal district says was a coordinated attack.
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Tax bills go out in the fall, and the amount a specific homeowner owes is based on a number of other factors — the taxable value of the property; the tax rates set by the city, school district and other taxing entities; and any exemptions that might lower their bill.
Most homeowners qualify for a base homestead exemption, and those 65 and over qualify for another exemption. The appraisal district encourages anyone who has not already applied for an exemption to do so.
“Most homeowners are happy that their net worth and property value has increased — until the tax bill arrives,” said Mark Sprague, a longtime housing market analyst.
In a recent interview with the American-Statesman, Bruce Elfant, the county’s elected tax assessor, warned of the appraisal spikes.
“We’ll all need smelling salts to recover from it because we know the values are going to be way up this year,” he said.
Owners who believe their property was incorrectly valued have until May 16 to file a protest and can do so online.
Overall, the county says its appraisal roll value increased 43% to $447 billion. That includes a 56% increase in residential properties, a 54% increase in commercial properties and more than $5.8 billion in new construction.
The new values are especially rough on people who bought a home in 2021. Unlike established homeowners, the newcomers are not protected by the 10% cap on the increase of their taxable value. 
Experts: Austin home prices to keep rising in 2022, but at a slower pace
The big jump in market values is consistent with trends in the Central Texas real estate market.
In March, the median price for houses sold in Travis County was $600,000, a 22% increase from a year earlier, according to the Austin Board of Realtors. Within Austin’s city limits, the median price was $624,000, also a 22% increase. Both were all-time highs. 
The rising costs reflect an unbalanced market in which there are more people looking to buy a home than there are homes available to buy. This is happening even as builders scramble to keep up with demand — new home construction is expected to hit an all-time high this year in Central Texas — and as more apartments are being added. Austin produced more multifamily housing — to rent and buy — in 2021 than the larger metro areas of Houston and Dallas.
Although the rising appraisals directly affect property owners, renters are likely to feel the sting from landlords increasing rent payments to cover their own rising expenses.
The market’s supply-demand imbalance accelerated early in the COVID-19 pandemic when Austin started to attract more people from other cities — including many high-wage earners — who found themselves able to work remotely. It has not stopped, much of it the result of large corporations moving or expanding into Austin and paying good money to recruit talent.
“Austin doesn’t really have a supply problem. It has a demand problem. Too much high-income demand,” local developer Ed Wendler Jr. said by email.
Charles Heimsath, president of Capitol Market Research, said a combination of factors triggered the increased values.
When a home goes up for sale, he said, it has greater appeal than normal because there are limited options for buyers. The cost is driven further by high earners and cash-rich investors motivated to close a deal. Further upping the price, Heimsath said, are low interest rates encouraging buyers to go higher in a bid than they otherwise would.
“This has led to the spike in home values, and now appraisals captured these higher prices,” Heimsath said.
He and other housing market experts say they expect the pace of price growth to slow some this year due to a continuing rise in interest rates and the construction of more homes.
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Still, the new appraisal values are probably higher than some homeowners expected. That’s because the appraisal district said it examined properties more critically for fair market value.
Marya Crigler, Travis County’s chief appraiser, said in a statement that a review by the Texas comptroller of public accounts found that the county’s market values in recent years were too low, particularly in western areas of the county.
The western part generally has larger and more expensive homes, and it includes some of the area’s most famous residents.
Actor Matthew McConaughey’s home on Lake Austin increased in value by 57% to $10.4 million. Hair care and tequila entrepreneur John Paul DeJoria’s home rose in value by only 2% after an increase last year of 26%. The home owned by technology giant Michael Dell appraised at the same value for at least the fifth year in a row — $17.3 million.
Podcaster Joe Rogan’s 11,000-square-foot lakefront mansion increased in value by 5% to $4.89 million. When Rogan bought the house in 2020, reports had it going for much more, anywhere from $14 million to $28 million.
Rogan moved to Austin from California —a pilgrimage made by many Californians in search of larger residential properties and the absence of a state income tax. Texas instead funds schools and services through property tax and sales tax.
“Over the last 10 years, the coasts have seen 30% to 40% appreciation,” said Sprague, the housing market analyst. “Texas has had over 150% in the same time. We are creating jobs; they are not.”
On May 7, Texas will hold a special election with two propositions that could lower property tax bills.
The first would reduce the taxes elderly and disabled residents pay to public schools — the largest item on most homeowners’ tax bills. The state would then cover the reduced revenue.
The second would raise the state homestead exemption from $25,000 to $40,000 for school district property taxes, which would save the average homeowner about $176 on the property tax bill.

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