AUSTIN, Texas — Appraisal districts are required to value homes on Jan. 1 of every year, and homeowners in Williamson County may start seeing a decline in the value of their homes.
This decline is due to the rapidly-changing housing market across the country and in the area. Homes in the county are indicating a value decrease of around 11% from Jan. 1, 2022, to Jan. 1, 2023.
Alvin Lankford, chief appraiser at Williamson Central Appraisal District, said the interest rate in Williamson County started rising during the middle of the year in 2022. The increased interest rates slowed down the housing market, and the cost to buy a home started to drop.
"We started seeing sales towards the end of last year that were lower than what they were at the beginning of the year. So we noticed that decrease, and it applied those values to the properties for this year," Lankford said.
Lankford said this change comes after two years of record home sales in Williamson County. There was an 18% increase in home sales from 2020 to 2021 and about a 47% increase from 2021 to 2022.
"We're living in a very hot marketplace here in the Central Texas area. More people are moving in than we have housing to give them. So that's caused prices to increase over the last few years quite dramatically," Lankford said. "But with interest rates going up middle of the year, last year, a lot of our entry level homes are lower."
When it comes to property taxes, Lankford said everyone wants their appraisal to be as low as possible. But when it comes to selling a home, everyone wants their appraisal to be as high as possible.
"The silver lining for them would be right now your appraisal at the Williamson Central Appraisal District has come down, which could indicate that taxes may come down on your property. However, the taxes aren't determined by us – the taxes are determined by the taxing units," Lankford said. "So when they determine tax rates later this year, we'll know what that means for people's property taxes."
Last year, property values went up approximately 47% and taxes on homesteaded properties actually dropped by 1%, according to Lankford.
"Taxes actually came down slightly, and so the silver lining would be that they may pay a little less in taxes this year because their values are a little bit decreased," Lankford said.
Due to Williamson County receiving a huge demand of people moving into the area, combined with a limited supply of homes, interest rates have been increasing – and making lower-end homes unaffordable.
"Last year, for the 2022 valuation year, in 2021, we were seeing about two weeks of inventory for the entire year. So that means that they were selling as fast as they would be put on the market," Lankford said. "For 2023, the valuation we did this year during the latter part of 2022, the inventory levels went up to about two and a half to three months of inventory. So you could tell there was a slow down in the market because there were more homes available."
Officials recommend that those who want to appeal their property appraisal first ask someone to look at the market value of their property. Lankford said the only thing you can protest is the market value of your home.
If you cannot show evidence that the market value should be less than the assessed value, it will not change your taxes whatsoever.
"People don't understand how their market value is decreased, but their assessed value has gone up. So it would be a good thing for people to understand that it's a mandatory increase by law," Lankford said. "So if your market value is higher than your assessed value in any given year, the assessed value has to go up 10% a year until it reaches the market value and they're equal."
The protest deadline for applicants is May 15.
Boomtown is KVUE's series covering the explosive growth in Central Texas. For more Boomtown stories, head to KVUE.com/Boomtown.