Property value appraisals determined by the Williamson Central Appraisal District’s evaluators will hit mailboxes April 2, and residents can likely expect to see increases in values similar to the past five years.
“All market indicators show that they will go up again,” WCAD Chief Appraiser Alvin Lankford said.

Real estate data from the Austin Board of Realtors shows the median home price in Williamson County settled at $270,215 in January, a 1.4 percent year-over-year climb. In Cedar Park, the median home price increased by 10.7 percent to $291,750, and the price increased by 1.9 percent to $290,000 in Leander in January.

Even as some municipalities and school districts in the county have lowered tax rates in the past few years, local homeowners continue to see the amount of money levied to local taxing entities steadily rise. And those levies, coupled with an increasingly premium real estate market, are pushing potential first-time homebuyers into the outskirts of the county.

PROPERTY TAX PROTESTS
Lankford’s team of appraisers has been out in neighborhoods since September determining this year’s property values through a variety of methods.

The most common method employed for property valuations for appraisal teams across Texas is the comparison approach, in which appraisers determine the market value of a property based off the sales of other homes in the neighborhood.

“We look at multiple sections within one neighborhood or the neighborhoods as a whole, looking for homes that compare to each other,” Lankford said. The WCAD also drives neighborhoods looking for visible improvements and analyzes aerial photography to identify property improvements, according to Lankford.
Suzanne Gantner, 2017 president of the Williamson County Association of Realtors, reports that several of her clients have balked at their property appraisals a year after buying their first home in the area.
“I have had clients call me after they get their appraisals, and they said, ‘Oh my god,’” Gantner said. “It could be horrible for them.”

Appraisal districts are required to appraise properties at market value, and Lankford said the real estate market itself drives the valuations WCAD puts on properties. That is, property appraisals are mostly a reflection of the market itself, and demand, Lankford said, is defining the local real estate market.

Gantner said real estate agents will often help their clients go through the process of protesting appraisals, which can begin immediately after property owners get their appraisals. State law this year changed the deadline for filing appraisal protests. The new deadline is May 15 or 30 days after the mailing of the appraisal notice, whichever is later.

Since property taxes are collected by several districts within the county, it can even be tricky for new residents to understand where their property taxes are going, said Sunnie Fox, a Realtor with Keller Williams Cedar Park.

“It can be a little difficult when you have people who are moving in and they don’t understand that the tax rates can vary from neighborhood to neighborhood,” she said.

Neighborhoods may sit within the cities of Cedar Park or Leander, Williamson County or Travis County, a municipal utility district, Austin Community College, an emergency services district or the Upper Brushy Creek Water Control and Improvement District, or WCID. Fox said it is important for possible homeowners to know the different areas and tax rates, and to know that they can protest the value of their home.

According to the WCAD the appeals process aims to settle appraisal value differences between the property holder and the appraisal district and can include reviews of sales documents, sales prices of similar properties, repair estimates and more.

“You want to bring in your home’s characteristics and sales of other homes like yours. A third avenue of appeal is how you’re being appraised compared to your neighbors,” said Debra Bawcom, vice president of Texas ProTax, an Austin-based commercial and residential property tax firm.

Appraisal appeals have exploded in popularity in Williamson County over the past five years. According to WCAD’s 2017 annual report, protests have more than doubled in that time, going from 20,108 protests in 2013 to at least 51,541 protests in 2017.

Does your appraisal protest hurt the local ISD?
Leander ISD is in a unique position since it is a designated Chapter 41 school district but sits in a financing gap where it does not send payments to the state for redistribution, but it also does not see subsidized payments from other districts in the state. According to the Texas Education Agency, the wealth of a school district is measured in terms of the taxable value of property in the district’s borders divided by the number of students in weighted average daily attendance.

LISD Chief Financial Officer Lucas Janda said the district was designated as a Chapter 41 district around 2006, but has not yet hit the threshold needed to begin paying into the recapture system. However, as property values rise, so, too, does the likelihood that LISD will soon be in a position in which it is required to send funds to the state. Janda said LISD is about two to three years away from handing off money to the state.

More than 9,000 residents within LISD successfully protested and changed the value of their property appraisals in 2017. According to data from the WCAD, the change in assessed value throughout LISD resulted in approximately $101 million dropped from the tax rolls, which would have returned about $1.5 million to the school district.

“Protests, in that context, leads to less value, which means that we have less monies available for debt payment,” Janda said. “That has an impact on what that tax rate may need to be for the upcoming year.”

Janda said the certified property values are the most significant for the school district. He said LISD receives preliminary values in April and certified values in July, as well as updates frequently from appraisal districts in order to make budget decisions for the next school year.

“Ultimately, it’s a matter of what those certified values are net of all the protests,” he said. “That gives us our playing field to work from on setting a tax rate to fund our debt obligations.”

First-time homebuyers in Williamson County
It is debatable whether rising property value appraisals have had a negative impact on the real estate market. Gantner said she personally has seen the number of sales the past quarter dwindle, though home sales traditionally slump around winter every year.

“Sometimes [homeowners] cannot sell a home because the buyer is checking out history of appraisals. It affects buyers, too, because if they see the house has gone up every year they’ll decide they don’t want it,” Gantner said.

According to data from ABoR, both Cedar Park and Leander saw increases in the number of home sales made in 2017. Leander experienced the greatest growth in the county with a 7.4 percent increase in sales throughout the year, followed by Cedar Park at 4.5 percent and Round Rock at 3.7 percent. As a whole, Williamson County saw its number of home sale closings increase by 5 percent from 2016-17.

Gantner said she has personally noticed a troubling trend of possible first-time homeowners essentially being priced out of southern Williamson County.

“Most first-time homebuyers can’t afford what the average [Williamson County] price is. They need to be in the $190,000s or $180,000s, and that’s few and far between,” Gantner said. “Generally those houses are gone by the end of the day that they come on the market.”

The data appears to support Gantner’s claims. According to the National Association of Realtors’ annual Profile of Home Buyers and Sellers, the median home price for first-time homebuyers in the United States in 2016 was $182,500.

In the Cedar Park and Leander area, Fox said it can be difficult to find homes below $200,000-$220,000.
“We are seeing that we have some clients who just don’t even qualify to purchase a home or they have to be pushed out even further north or west, and they may not get the home that they want because of the price point,” she said. “Leander has a little more inventory around $220,000 and less, but in Cedar Park, it’s slim pickings when it comes to that price point.”

Nine municipalities in Williamson County had median home prices under that number, according to ABoR’s available December market data—Bartlett, Coupland, Florence, Granger, Liberty Hill, Taylor, Thorndale, Thrall and Weir.

Steadily climbing property value appraisals can end up as the deciding factor for first-time homebuyers, according to Gantner. First-time homeowners sometimes are not immediately provided the financial easement provided by the homestead exemption, which applies a minimum $25,000 appraisal exemption on the property at which an owner claims primary residence.

Fox said she stresses to her clients to file the homestead exemption after they’ve been in the house for one year.

“That’s one piece of advice that I like to give people, making sure that you’re on top of that and paying attention to it,” she said.

The homestead exemption provides further relief for homeowners by placing a minimum 10 percent cap on year-to-year appraised values, meaning that if home values are rising at more than 10 percent per year, the cap can provide essential property tax savings.

In a red-hot Williamson County housing market, the lack of that cap could be the deciding factor between buying a first home or continuing to rent.

“It’s getting harder and harder for the first-time homebuyer to buy a home,” Gantner said.