Residents can expect several new residential developments to pop up in 2017 as residents continue to flood Leander and Cedar Park. But experts say housing prices and property tax payments could also go up.
The population of Cedar Park rose 35.5 percent from 2010-15, and the Leander population increased by 37.6 percent during the same time period, according to U.S. Census Bureau data released Dec. 8.
Both cities will be in high demand for homebuyers in 2017 because of their proximity to health care facilities, quality school districts and thoroughfares into Austin, said Brandy Guthrie, 2017 president of the Austin Board of Realtors.
Guthrie, who works in the Cedar Park and Leander area, also said the increasing amount of retail and restaurant options will draw more residents.
“That’s always an indicator and a driver for where people want to be,” she said.
Home values and property taxes
Vaike O’Grady is the Austin regional director for Metrostudy, a company that provides data on residential construction and the housing market. Metrostudy representatives collect data by driving through the market and making physical observations on the status of new construction, O’Grady said.
She said the price of homes continues to increase, but the pace of that increase has slowed compared to 2015 and early 2016 because of competition—more new home options are available in surrounding areas, such as Georgetown and Liberty Hill.
“There’s more supply coming online ... outside of the Cedar Park and Leander areas,” she said. “Builders aren’t quite able to raise prices like they could have.”
The competition is prompting builders to offer smaller homes in the area to keep prices lower and attract more buyers, she said.
“That is working in favor of the customer,” she said.
Since 2010, the mentality has been “bigger is better” among builders and buyers because of lower interest rates caused by the economic recession, O’Grady said. But as interest rates increase, buyers may not be able to afford larger homes, she said.
Guthrie said much of the residential growth in Cedar Park and Leander is because the median home price in both cities remains lower than the Austin market. But with low inventory and high demand, Guthrie said she predicts home prices in the area will continue to increase.
“As property values continue to rise, it’s likely that property [tax payments] will increase as a result,” she said.
Property tax payments are one of the largest costs of home ownership for residents in Travis and Williamson counties, she said.
Residents will likely see higher property tax bills in Cedar Park and Leander this year. In September, Cedar Park City Council approved a property tax rate of $0.474 per $100 valuation for fiscal year 2016-17. The rate is a half-cent less than the FY 2015-16 property tax rate but is higher than the effective tax rate, or the rate that would generate the same amount of money as the FY 2015-16 budget, meaning property owners will likely pay more.
According to city data, the average home value in Cedar Park increased by 9.11 percent from 2015 to 2016—from $265,991 to $290,223. With the new tax rate, the owner of an average-valued home in Cedar Park could see an increase of about $101 in his or her tax bill in 2017.
Leander City Council also adopted a lower property tax rate in September of $0.599 per $100 valuation for FY 2016-17. Again the rate is lower than the FY 2015-16 rate but higher than the effective tax rate.
According to the city, the average home in Leander increased in value from $234,851 in 2015 to $262,729 in 2016, or an increase of 11.87 percent. The city estimates the increase will amount to $19 more per year on the average resident’s tax bill.
The rate of growth
In Cedar Park, Guthrie said homes are spending an average of 39 days on the market.
“Which means they’re selling very quickly,” she said.
Leander home sales are also up from last year, and the city’s demand is rapidly catching up to the demand to live in Cedar Park, Guthrie said. Leander also has about a dozen new developments in the works as well as available land where more growth can occur, she said.
Cedar Park does not have as much room to grow, she said.
“[Both cities] have been very smart about the developments … to ensure what they do have available is being utilized to its full potential,” Guthrie said.
O’Grady said the Leander and Cedar Park area has about 22 months of supply of vacant developed lots, which is considered healthy. Another 1,300 lots are in development, which means more new homes are coming to market in 2017, she said.
“It’s still a very active submarket,” she said.
Metrostudy data show the number of annual starts, or new construction in the area—at 2,030 for Oct. 1, 2015-Sept. 30, 2016—is close to the number of annual closings, or the time when construction is complete and the residence appears occupied—at 1,759 for the same time period. That means people are buying new homes, O’Grady said.
District plans for more students
Guthrie said Leander ISD has been planning for residential growth, and she said she is confident it can support the growing student population.
“I know that they work hand in hand, understanding where new developments are going in,” she said.
Leander ISD works with Population & Survey Analysts in College Station to keep track of future development as it relates to student population growth. According to representatives Pat Guseman and Stacey Tepera, who presented student population projections to the LISD board of trustees in October, LISD will need six more elementary schools, two more middle schools and one more high school In the next eight years.
Guseman said the district saw 1,100 more students in the 2016-17 school year, and it can expect an additional 1,100-1,350 students annually over the next 10 years.
Although the percentage of annual growth in LISD has slowed because of rising home prices, LISD was still the 14th fastest-growing school district in Texas last year, Guseman said.
LISD is scheduled to open Elementary School No. 26 in fall 2017 directly in front of Stiles Middle School on Barley Road in Leander.
Tom Glenn High School, which opened in the fall, is in the heart of north Leander where much of the district’s growth is occurring, Tepera said. But by 2024, Glenn will likely reach its threshold for overcrowding, she said.