Homeowners in Grapevine, Colleyville and Southlake are seeing increased home values in their annual appraisals this year. This is not the first time, however, that area homeowners have experienced higher valuations.

Since 2015 the total appraised value of homes in Colleyville has increased by approximately 24 percent and by 25 percent in Grapevine and 26 percent in Southlake, according to data from Tarrant Appraisal District.

Ted Wilson, principal at Residential Strategies, a residential real estate market research company based in Dallas, said a typical housing market sees a 1-2 percent annual price increase.

Realtor Jen Blackwood with Blackwood Real Estate Advisors said the increase in home values is causing an unbearable load for some homeowners, causing more protests.

“Property taxes are a big problem for people because the values are going up so high every year that it’s pricing some people out of their home,” she said. “I know some people’s values have gone up $3,000-$4,000 a year, and that’s a lot. I know some elderly people who have their houses paid off but can’t afford their property taxes because they live on a fixed income.”

An increase in home values across Tarrant County has caused an uptick in the amount of homeowners filing  appraisal protests.

TAD administrator Mary McCoy said as of July 7 there had been 113,000 protests filed, which is a 6.6 percent increase from last year.

Although the appraisal protest can take a significant amount of time, Realtor Alisa Runge with Berkshire Hathaway said she believes it was worth the time this year.

“People have to remember: If you don’t protest this year, that appraisal value sticks, and there is no going back; it will only continue to get higher,” she said. There’s also no negative impact. Even if you protested and they found it was worth more than that what they originally appraised, they aren’t going to go in and bill you at the higher rate.”

Runge said the TAD can only bill homeowners up to 10 percent of the change in value year-over-year.

“If a homeowner had a 30 percent increase, TAD would only be able to tax you on the first 10 percent,” she said. “It doesn’t mean they aren’t going to try and catch up that 30 percent in value, but it might take them five years before they can catch that up.”

Why the increase?

TAD Residential Appraiser Danielle Goldsmith said the number of people moving to Tarrant County is the reason why home values continue to increase. Goldsmith said TAD appraises homes based on the prices of recent home sales.

“The market is determined by what properties are selling for,” she said. “And there are a lot of people coming from other states, such as California and Georgia, that are buying properties over the actual listing price, and that is the reason why market values are going up.”

Goldsmith said, for example, a home that was built in 1985 may be listed for $200,000, but it may receive an offer for $230,000.

“Once they close on that property they have just made that property worth $230,000, so that lets us know that even though it was built in 1985, people are out here willing to pay $230,000 for a 1985 home,” she said.

Goldsmith said TAD is required by Texas law to appraise homes at 100 percent of market value.

With companies such as Kubota Tractor Corp. moving their headquarters from California to Grapevine, and Toyota Motor Corp. moving to Plano, real estate agents said they are seeing an increase in the number of out-of-towners who are able to do cash buys or pay more than the listing price.

“The cost of living is different there,” Goldsmith said. “So they are coming here where the cost of living is cheaper, so they don’t mind going into bidding wars and going over the listing price. But they don’t realize once they do that you have just contributed to driving the market up.”

Wilson said since 2011 the Dallas-Fort Worth area has seen “an incredible influx” of jobs—to the tune of 600,000 positions—which has put an increasing strain on the market.

According to the January 2017 Texas Relocation Report, the total number of people moving to Texas from out of state in 2015 increased 2.8 percent year over year to 553,032 people.

The highest number of people moving to Texas in 2015 came from California with 65,546 people, followed by Florida with 33,670 people and Louisiana with 31,044 people, according to the report.

However, it is not only out-of-state residents who are contributing to the growth. The report states when it comes to people moving to the DFW Metroplex, people moving from Houston and Austin account for the largest amount of new residents. Houston had a total of 13,852 people move to the Metroplex, and Austin had 9,013 people move to DFW in 2015.

However, the influx of California residents has helped create and maintain the seller’s market the area is experiencing, according to realtors.

Blackwood said everyone is wondering if the real estate market is in a bubble and will experience a similar downturn that it took during the Great Recession.

“Right now, no one is forecasting a bubble,” she said. “We are not going to have the same peak and valley like before, but it is going to level off some.”

The attraction to the area

Blackwood said there are two major draws to the Grapevine, Colleyville and Southlake areas—proximity to the Dallas-Fort Worth International Airport and quality school districts.

“Dallas-Fort Worth really is becoming this huge hub for businesses,” she said. “So a lot of businesses from the West Coast and the East Coast are coming and meeting in the middle. And Grapevine/Colleyville/Southlake is in a great location in the Metroplex, especially since it’s so close to the airport.”

Carroll ISD and Grapevine-Colleyville ISD, with better-than-average state and national test scores and high graduation rates—are also reasons why people move to the cities.

“People specifically move here because they love the schools; they love the sports,” she said.

Issue of affordability

Six years ago, at any given time, there were about 25,000 homes on the market for less than $200,000 in the Dallas-Fort Worth area. That number has shrunk to less than 5,000 today, Wilson said.

Because buyers are entering bidding wars and homes are selling for more than the listed price, Blackwood said it is becoming harder to find a home that is $300,000 or less in the area.

“Since 2013 we have seen an 84 percent decrease in single-family properties available in Southlake for under $300,000, and in Colleyville, a 75 percent decrease,” she said.