Since mid-2022, median market prices, or the dollar amount a home can sell for, for single-family homes in Williamson and Travis counties decreased by approximately 13%. However, residents are still seeing increases in the taxable value, or the amount of a home that can be taxed, based on 2023 appraisals from the Travis and Williamson Central Appraisal Districts.
Data from Williamson County shows the median home market value increased from 2021 to 2022, but then fell in 2023.
Similar trends are occurring in Travis County, where median market values jumped from $411,261 in 2021 to $612,102 in 2022.
While the median market value for homes in Travis County did not decrease in 2023, the increase is much smaller than in previous years at $612,568.
The latest appraisal from the WCAD shows the decrease in general market value is paired with an increase in new residential development projects. This occurs as homes take longer to sell, or homeowners deterred by high interest rates choose to rent apartments.
WCAD Chief Appraiser Alvin Lankford said home values across the county increased by about 50% from 2021 to 2022. Therefore, most homeowners saw increases in the taxable value of their homes as well as the market value of their homes.
However, Lankford said that in 2023, many area homeowners saw the taxable value of their homes rise while the market value of their homes fell.
“I’ve been doing this for 23 years, and this year was the largest decrease in residential value we’ve ever seen,” Lankford said.
Both the Travis and Williamson central appraisal districts sent out home valuations March 31 that reflect the lower market valuations.
Amid the environment, some area residents are finding local property tax situations unsustainable.
Terri Washburn, a retiree who moved to Round Rock in 2021, said she is leaving the state because the yearly increase in property taxes on her home in 2023 is unaffordable.
Barriers to buying
Jonathan Voight, senior vice president at local mortgage lender Verabank, said the decrease in home prices is strongly linked to increased interest rates as federal regulators work to combat inflation. When interest rates rise, the purchasing and borrowing power of homebuyers is impacted, he said.
When buyers can’t qualify for higher loans to purchase at higher prices seen in previous years due to interest rates, homes remain on the market for longer periods of time, Lankford said. Some sellers then choose to lower their asking price, or buyers negotiate lower, leading to the lower sale price.
Clare Losey, a housing economist with the Austin Board of Realtors, said the disconnect between falling market values and increased property tax bills is based on the acceleration of the local real estate market due to the lower interest rates seen in 2020 and 2021, adding fuel to the fire of an already hot market.
She said although the area is in an adjustment period returning to higher interest rates, home values and property taxes should become more balanced over time, depending on future market shifts.
“In a rapidly appreciating market, or a market in which home prices are moderating, it’s going to take a while for the appraised values to reflect that change,” Losey said.
