Williamson County Market Analysis
Austin Area Housing Market Summary
Numerous media outlets have reported dramatic increases in the Austin Metro area's Housing market, both in terms of the number of home sales and sales prices. Community Impact reported in July of 2021, "As housing prices rise in Travis County, buyers have turned to outside of Austin for homes, raising prices in Williamson County." More recently, KVUE reported that "more homes were sold in the Austin-Round Rock area in 2021 than ever before," and that limited supply was driving sale prices up. The Austin Business Journal echoed KVUE's report by noting dramatic jumps in housing prices that will likely continue to rise in 2022 and that of the five counties in Austin's metro area "prices are rising fastest in Williamson."
It seems there is no shortage of stories recounting record high sale prices in Williamson County. For more media reports about market trends, visit https://www.wcad.org/category/market-watch/
Chart data from Texas A&M
WCAD's Analysis Mirrors that of Real Estate Professionals
Appraisal districts are tasked with setting market values that reflect the local real estate market as of January 1st. While the reporting of the record setting real estate market in Williamson County was taking place, WCAD was also collecting and analyzing available market data for use in the January 1, 2022, valuations. Much of the data analysis illustrates and reiterates the initial media reports.
WCAD has worked hard to make our valuations the most accurate they possibly can be. For more information on how we analyzed available market data to determine market values read a more in-depth overview of the WCAD Analysis process.
*Note: WCAD does not value by zip code. WCAD's data has been aggregated by zip code for display purposes only.
The Most Significant Factors in Valuation
While there are many variables that will impact a property's value, two of the most important during this time of dramatic real estate changes have been an increase in the number of sales and the change in sale price over the time studied.
2021 saw a historic rise in home sale prices. With such dramatic increases, in some cases 5-7% per month, we must first adjust for time of sale when doing sales comparison analysis. For example, if a house sold in June 2021, if market value were left at the sale price, it could be undervalued by 20% or more by January 1, 2022. Any property studied using that sale as a comparison would undervalued as well.
For a more detailed explanation of changing market conditions and appreciation, visit Changing Market Conditions – Appreciation
Analysis Using Comparable Sales
Using comparable sales to determine market value is the most accurate method of appraisal in a rapidly changing housing market as it reflects the actions of buyers and sellers in the market. Once comparable sales for a subject property are determined, adjustments are made for time, physical/functional differences between properties, etc. to arrive at "adjusted sale prices," which will be used to arrive at an indicated value for the subject property.
For more information: Residential Valuation Approach
What Can Property Owners Do?
Home values are on the rise, however, an increase in property taxes is unlikely to be proportional to the increase in home values. Here are a few options to help mitigate property tax liability:
Take Advantage of Exemptions
While there are many exemptions available to property owners, one of the most effective at slowing the increase in tax liability during times of rising property value is the Residential Homestead Exemption. The homestead exemption offers a reduced value to which tax rates are applied, but the greatest advantage of the homestead exemption is that it limits the amount your assessed value can increase to 10% from one year to the next.
For more information on the benefits of the homestead cap, visit https://www.wcad.org/hs-cap/.
For information on how to qualify and/or apply for the homestead exemption, visit https://www.wcad.org/online-exemption-information/.
Review Your Value
Assessed Value is capped at a 10% increase for properties that received a Homestead Exemption in 2021 and 2022. If your opinion of value is higher than the capped assessed value, there is no need to protest. Remember that a lowered Market Value for this year does not influence the Market Value for next year and therefore it will not influence next year’s homestead cap value.
Upon reading the Sales Comparable Grid that may have been provided with the notice, determine if your market value is higher than what you could have sold it for on January 1st. If not, there is no need to protest. If so, try speaking with a realtor about receiving accurate sales; not just the lowest, but all comparable sales. If these sales are not similar to the subject property in quality, size, age, attributes, neighborhood, and market level transaction, then WCAD Appraisers cannot use these sales.
For information on how to protest, review our guide to online protesting at https://www.wcad.org/online-protest-filing/.
Participate In Taxing Unit Budget Hearings
In 2019 the State Legislature set a revenue cap on taxing units - 2.5% for schools and 3.5% for other taxing units. This means that as property values increase, taxing units will need to decrease their tax rates or run the risk of triggering an election to adopt a tax rate.
For more information on your taxing units and how you can be involved in setting tax rates, visit https://williamsonpropertytaxes.org. Certified values, proposed tax rates and tax rate hearing dates will be available starting in mid-August
WCAD has made an easy-to-follow overview of the tax system, which can be found in our Six Key Terms pamphlet.