Williamson County Market Analysis

After the incredible 2021 residential real estate market produced never-seen-before value appreciation and record breaking 2022 appraisal increases, the year began with similar upward trends as the prior, which led to speculation as to how much higher local values and median sale prices could rise.  In the Spring of 2022, Community Impact reported that the median home price across Central Texas experienced “a 20.5% increase over April 2021.”  The high demand and low supply in the area continued pushing values up through the first half of the year.  However, Austin Board of Realtors June report pointed out that “a combination of cooling demand from the tremendous surge in mortgage rates” and “a noticeable increase in supply” was beginning to slow the pace of home price growth.  Not much later, reports began to surface which pointed out that the market appreciation in the area was finally cooling down in spite of the rising Summer heat.  By the Fall, it was apparent that the interest rate hikes that began in May resulted in suppressing the rapid value appreciation that took place in Central Texas residential real estate the past eighteen months and it was noted by the Austin Business Journal that there was “more inventory and lower prices.”

Sales data compiled by WCAD for the 2023 valuations and the resulting statistics and graphs reiterate the real estate trends that took place in 2022 and reported on by the media.  For more information and data on that aspect of the valuation process please visit Changing Market Conditions – Appreciation and/or Depreciation. 

While a realtor is hired to set or negotiate sale prices at any time throughout the year, with conditions of the market at that given time being the primary guidance, appraisers are required to establish the value for only one particular day in the year, and for appraisal districts, that focus is January 1st.   Although the days of the estimates of value are different for those professions, each relies on sales of other properties to establish those values.  Prior to the beginning of each yearly reappraisal, WCAD collects and analyzes available sales and market data for use in the January 1 valuations, and that sale data typically spans twelve months back from the appraisal date.  For more information on how WCAD analyzed available market data to determine market values read a more in-depth overview of the WCAD Analysis process.

Market conditions and time adjustment analysis is critical for any appraisal and is done to establish any rates of market appreciation or depreciation that took place during the time frame that spans the collected sales.  That way, the sales can then be trended by the appropriate rate, extracted from the analysis, from the date they took place and made relevant to the January 1st appraisal date.  Market conditions generally change over time.  The January 1st appraisal date is a specific point in time, so sales transacted before this date must be examined and adjusted to reflect any changes that may have occurred since then.  Without time adjustments, the sale prices of properties selected in sale comparison grids will reflect the market conditions as of the date when they were sold, rather than the January 1stvalue of similar real estate.

For a more detailed explanation of changing market conditions and appreciation, visit Changing Market Conditions – Appreciation & Depreciation

Using comparable sales to determine market value is often the most accurate method of appraisal for residential property 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 and physical/functional differences between the properties to arrive at "adjusted sale prices," which are then used to arrive at an indicated value for the subject property.

For more information: Residential Valuation Approach 

While there are many exemptions available to property owners, one of the most effective at reducing a property owner’s tax liability 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 regardless of the percent change in the MARKET value from year to year, it limits the amount the ASSESSED value can increase to 10% from one year to the next if the owner had the exemption on January 1 of the prior year. 

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/.

The appraisal district is required to set the Market Value of property within the county each year, and the percent change from year to year is not limited.  However, the Tax Code requires that the Assessed Value is capped at a 10% increase from one year to the next for properties that received a Homestead Exemption on January 1st of the prior year.  If your opinion of market value is higher than the capped assessed value, there is no need to protest. Also, a lowered Market Value for any year does not influence the Market Value for next year.

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 may not use these sales if others that are more similar are available.

For information on how to protest, review our guide to online protesting at https://www.wcad.org/online-protest-filing/. 

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.