According to the Houston Association of Realtors’ Annual Market Report, 2020 was an exceptional year for the real estate market. According to all the trends - properties sold, total home values and average sale values, the housing market thrived in 2020. Despite the devastating effects of COVID-19 on the US economy, the Houston real estate market set record after record as it worked through the new normal created by the pandemic. With 2020 trends in the rearview mirror, the impact on your Texas property taxes are front and center as Harris county property owners receive their new (and most likely higher) appraisal values on their property.
A record 96,151 single family homes were sold in 2020, up 10% over the 86,996 sold in 2019, the previous calendar year. Total dollar volume exceeded $35 billion, up 18% over 2019. Home prices set new December highs with the average home value rising 11.4% to $347,164 while the median price – the figure at which half sold for more and half sold for less – rose 8.7% to $273,443.
Average and median home values set records which will result in higher appraisal values when HCAD publishes its 2021 Notice Values and the protest season begins in early April.
In what many thought would be a down year in the US housing market after the onset of the pandemic turned out to be quite the opposite. While the pandemic interrupted housing activity in March and April, the market substantially rebounded through the remainder of 2020 as a result of real estate’s listing as an ‘essential service.’
The strongest December activity occurred in the $500,000 to $750,000 price range where sales jumped 81% over the prior same month. Second place was taken by homes priced $750,000 and up which grew 54% and in third place were homes in the $250,000 to $500,000 price range which grew 45%.
Year to date average home sales prices rose 5.9% to $324,000 compared to $306,000 in 2019. Median prices increased 6.1% to $260,000 compared to $245,000 last year. But December’s average rise to $347,164 and median to $273,443 reflect the acceleration of values at year end. In fact, December month end pending sales of single family homes rose to 7,469 -- a 41% increase over the previous year.
Rising values are likely to continue well into the current year since new listings – unsold inventory – declined to a 1.9 month supply from a 3.2 month supply a year ago. The Real Estate Center at Texas A&M University estimates 6.5 months of inventory as a balanced housing market. Nationwide inventory stands at 2.3 month supply according to the National Association of Realtors. Houston’s experience is not an outlier.
With values rising faster than incomes, homeowners are faced with a dilemma: rising values means rising equities but also rising property taxes. Rising Texas taxes can have an immediate and lasting effect on homeowners, while rising equities can help an owner when they look to sell their residential property. Harris Central Appraisal District (HCAD) publishes its new taxable values each year in April. In April, homeowners can expect an increase in property value based on 2020 trends.
Owners can protest to the Appraisal Review Board by May 15 or sixty days after receipt of HCAD’s Value Notice, if they receive one. (Not all homeowners will receive a Value Notice.)
If you are dissatisfied with your 2021 proposed property values, Property Tax Protest can take care of the entire protest process on your behalf. We will protest your 2021 market value on both Comparable Sales and Inequality of Appraisal, making us more likely to succeed on your protest. Inequality is an equalizer for homeowners who feel they are overtaxed by a rising market. All you have to do is fill out one simple form and we will take it from there.
We will file a protest on all grounds available for your property, including but not limited to a comparison of your proposed value to the rest of the market and inequality of appraisal. A protest based solely on comparable sales is less likely to succeed than one which includes Inequality of Appraisal (comparable assessments). Inequality is an equalizer for homeowners who feel they are overtaxed by a rising market, such as one Harris county experienced in 2020.
Inequality is one of the least understood arguments for a reduction before the ARB. When successful it always results in a value below market. Many agents don’t know how to pursue Inequality due to its complexity and nuances. At Property Tax Protest, we’ve done it successfully more often than not. We will work on your behalf to minimize the amount of Texas property taxes you owe in Harris county. You can get started here.