By Ben Tinsley
Less than 10 years since the U.S. economy crash, subprime mortgage crisis and subsequent recession, property appraisals in the Dallas-Fort Worth Metroplex are at an all-time high, experts contend.
The consensus is, when property appraisals on area homes are not automatically being raised 10 percent each year because of appraised value (area, location amenities and improvements), they skyrocket because of market value — what the homes would fetch if sold right now in the marketplace.
“Think about what happens when you automatically increase someone’s home by 10 percent each year,” said Evan Fetter, president of Dallas-based Lower My Texas Property Taxes LLC. “Do people automatically receive 10 percent raises from their jobs each year? Probably not. And for many people this makes owning a house not that affordable.”
For many, property appraisal season in recent years has been marked by rising home prices, low inventory and shockingly-large tax hikes.
“A lot of my clients had their home values raised anywhere from $25,000 to $400,000,” Fetter said. “One that was valued at, say, $290,000 last year, was valued this year at $390,000. … It’s been pretty nuts.”
Dallas, Fort Worth, Austin, San Antonio, Houston, all face the same issue, experts said.
Alan Levy, real estate agent, with the Alan Levy Group at Ebby Halliday Realtors, agreed, saying there are huge tax increases at the houses listed between $150,000 and $300,000.
The 2015 appraisals were mailed out around April and May and the resulting protests are due back in by June 1. It has, therefore, been a fairly intense 60-day period. Many local experts such as Fetter say they are waist deep in customers right now.
“I have been getting a record number of phone calls usually at the last minute from people wanting to file protests,” Fetter said. “In the last three days I have picked up 60 new clients. I had 600 new clients last year read, and I am hoping to end this year somewhere between 800 and 900 clients.”
McKinney realtor Randy Wilson said with today’s high dollar property stakes, it’s really hard to believe the U.S. economy crash and subprime mortgage crisis and recession were less than 10 years ago. That crisis caused a downward spiral in home prices, mortgage delinquencies, foreclosures and devaluation of housing-related securities.
“Go back a couple of years when we were on the other side of the market and the numbers were really — really — down,” Wilson said. “Now we’re up 20 to 30 percent over the past couple of years. Ten percent increases year after year for the past two or three years. We have recovered from the recession to the highest prices we’ve ever known.”
Experts fear the Central Appraisal District’s tactics are out of control.
“The market value amount on homes will keep going up until the appraisal district reaches what they see as the straight sale value of the home in the current market in Dallas County,” Fetter said.
However, with the amount of homes ready to be sold at an all-time low, has created a bit of a seller’s market, Alan Levy said. It is particularly so for Baby Boomers with high maintenance homes to sell, he said.
Levy has continually advised Baby Boomers who are giving thought to selling their homes to do so as quickly as they can.
“My advice to my closest friends is today is the day,” Levy stated in a recent column on LinkedIn. “In Dallas-Fort Worth, we are lucky to find ourselves in a unique, ‘red-hot’ seller’s market. There are lots of buyers and a shortage of good inventory. Now is the time to react and get the most money for your house and reduce your future expenses. It costs nothing to get an experienced real estate agent to provide you with comps (comparable listings/sold prices in your area) and even a suggested asking price for your home. I personally do this all the time. Once you have that information in hand, you can make an educated decision whether to take the next step and look at options for a future purchase.”
Levy also advised these potential sellers to find a professional stager who can prepare their homes for sale.
“For a varying fee, the stager will rearrange furniture, remove clutter and temporarily bring in more desirable furniture if needed,” Levy said. “Storing away personal items like family photos can help a buyer envision their own life in your home. In most cases, professionally staged houses typically sell much faster, and often times get the seller the highest price for their home.”
Randy Wilson said Dallas’ extremely low inventory makes the selling and buying process problematic.
“From a seller’s standpoint they like the value going up but the buyers want something for their value and they are not seeing it,” Wilson said. “We have overinflated and overpriced the inventory. Once it comes back to being stable the market will level itself off.”
Randy Wilson said it’s a really tough market right now because Texas is a nondisclosure state and appraisal authorities don’t have legal access to the exact numbers of how many houses are sold.
Overpaying for housing
“Legally they can’t go and ask you for that information when you sell a house,” Wilson said. “The house might be valued at $200,000 but sells for $230,000. Next year that valuation goes up 10 percent.”
Another factor is the people coming to the Dallas area to buy property who are overpaying for housing, Fetter said.
“They really don’t think they’re overpaying because they’re moving from California and New York, but it’s really affecting those who live here,” Fetter said.
When approaching a professional to help reduce the tax hike as much as possible, don’t ever pay for the work in advance, experts warn.
“If I don’t get my client reduced they don’t owe me anything,” Fetter said. “So I’m very motivated to get them reduced.”
Fetter said any market value that appears too high probably is — and should be protested.
“If you’re not sure what to do call me or another tax consultant to give you some advice,” Fetter said. “If you know a realtor, call a realtor. It’s a matter of if you really want to pay that much tax.”
Fetter said an expert generally is hired to meet clients at their homes and assess what is really happening there in terms of valuation — versus what the appraisal district representatives claim they see.
“If I’m the expert, I meet with the appraisal district and try to work out a number they are comfortable with and you are comfortable with,” Fetter said.
June 1 is the deadline to appeal your appraisal.
Educate yourself on how to file online. Search for the information you need over the Internet:
State of Texas Information: comptroller.texas.gov/taxinfo/proptax
Dallas County: DallasCAD.org
Tarrant County: TAD.org
Denton County: DentonCAD.com
Collin County: CollinCAD.org