Increase in property values caused by 2019 housing market, not COVID-19

Increase in property values caused by 2019 housing market, not COVID-19
A statement from the Smith County Appraisal District reads in part, “any impact on values from the coronavirus pandemic will be reflected in the 2021 property valuations. (Source: Pixabay)

TYLER, TEXAS (KLTV) - Many East Texas property owners are seeing increases in their property values this year, but why?

A statement from the Smith County Appraisal District reads in part, “any impact on values from the coronavirus pandemic will be reflected in the 2021 property valuations. There are currently no provisions in the Tax Code to allow for reduced values for 2020 based on an event such as the current health crisis.”

The reason for the increase is considered to be the 2019 housing market. In Smith County, more than 870 new homes and almost 50 new subdivisions were added, according to the Smith County Appraisal District. On average, Smith County homes sold in less than two months. According to sales reported to the appraisal district, the trend for homes selling under $300,000 indicated closer to 15 days on the market. That’s down by 13% from 2018.

“The total number of residential sales reported to SCAD increased more than 15% last year over the previous year," Carol Dixon, Smith County Chief Appraiser, said. "For entry-level houses, there was a 66% increase in the number of homes sold in 2019 with the average entry-level home’s sale price increasing approximately 40% compared to 2018. For entry-level homes, the median price per square foot increased from $86.56 in 2018 to $104.40 in 2019, a 20.6% increase for homes under $200,000, another indicator of the strong market in 2019.”

Dixon said the Texas Property Tax Code does not allow for property appraisals to be frozen. She said appraised values in 2021 will reflect the market condition from this year.

“An analysis of this market data has resulted in significant changes and we suggest all property owners acquaint themselves with the market as of January 1, 2020," Dixon said.

Property owners who disagree with their valuation must file a notice of protest by June 10, or 30 days from the date after their notice is delivered.

“Everyone pretty much across the board is seeing a fairly significant increase in their property taxes based on their values,” Jerri Johnson, real estate agent, said.

Johnson said you’ll need to have some numbers to stand on before protesting. Real estate agents can help property owners with looking at the values of homes that have sold in the area and homes that may be more relatable to your property.

“I’m going to see what year of construction your homes, how many square feet, and the general area of where your home is located,” Johnson said. “We don’t want to comp a 1995, 2,000 sq. foot home with a home built in 2019 that’s 3,000 square feet. They’re just not the same animal.”

If you live in a large enough subdivision, comps can be run on your specific neighborhood. In rural areas, agents will look for homes with a similar year of construction and homes similar in size, according to Johnson.

Johnson said you’ll want to have more than just one example before filing a notice of protest.

“I think this is the biggest across the board increase I’ve seen for Smith county as a whole,” Johnson said.

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