Appraisals are out, upward trend continues
By MIKE EDDLEMAN
Appraisal notices have been mailed to Williamson County property owners, kicking off the annual head-scratching and hand-wringing over ever-increasing values.
While the increase across the county is less than last year – roughly 8 percent in 2017 compared to 6 percent this year – Liberty Hill area residents are seeing a more substantial hike. For those considering filing a protest, a May 15 deadline has been set by the Texas Legislature this year, earlier than the May 31 deadline in previous years.
Williamson County Chief Appraiser Alvin Lankford said the increases are not about punishing residents with more taxes, but about supply and demand.
Values are chosen specifically using market transactions, according to Lankford, and in Williamson County’s low-supply, high-demand market, that means increased values. There were 7,200 new homes built in Williamson County in the last year, but homes are not sitting on the market long.
“If you were to turn off the spigot today and not put another home on the market, it would take less than two months to sell everything out there,” Lankford said. “A balanced market is about six months of inventory.”
The appraisal district determines values by looking at the cost, the age and sales in the area as a starting point.
“The base valuation for a home is cost minus depreciation,” Lankford said. “Then that number is adjusted by the sales in your area or your neighborhood. If those sales are showing the market is moving up, we move everybody up. If it is saying they are going down, we move them down. We put everyone on the same model.”
Things get much more specific to all the details of a given property once a protest is filed, looking more closely at size, amenities, and using comparables.
“We actually take a much more specific look at your home,” Lankford said. “We make adjustments to the comparables and then we come to a determined value after those adjustments. That methodology is what we call a fee appraisal methodology and that’s what you’d see when you mortgage your house or you refinance.”
While this method may seem more fair to the individual property owner, it is impractical for the appraisal district in a county that must put a value on 217,000 properties.
“It is a much more specific, time-consuming look at your property,” Lankford said. “The reason we don’t do that en masse is because we have so many properties to value each year. There’s just not enough time to do that. We’re working on getting better at that. We’ve got some algorithms in place to help us make choosing comparables more automated.”
Lankford understands the perception that values may be pushed up to generate tax revenues, but reminds property owners that tax rates are set well after appraisal values and there are built in methods to ensure the district stays on target with accurate valuations.
“We don’t have a lot of incentive to increase values because the more increase we have the more protests we get,” he said, adding that keeping values down would eventually be even more problematic for county residents. “Nor do we have incentive to keep values suppressed because we’re audited by the Property Values Study from the comptroller’s office every other year. What that does is make sure we are at 100 percent of market value. So we’re kind of blocked in to being real close to 100 percent of market value by the study. If we’re not, we start losing funding for local schools.”
The Williamson County Appraisal District (WCAD) has been at 99 to 100 percent appraisal-to-sale ratio, according to the comptroller’s value study each year it has been conducted. In years opposite the Values Study, the WCAD is subject to the Methods and Assistance Program Review, ensuring it strictly follows the tax code and uniform standards of appraisal. Since 2007, WCAD has passed with 100 percent each time, according to Lankford.
Appraisers spend most of their time dealing with new properties and documented changes.
“The majority of their time when they are out in the field is measuring new improvements because of the amount of time it takes,” Lankford said. “The other thing they do is they go out and review properties that have permits or changes to their properties, that sort of thing. As you can imagine, with 200,000-plus properties we need to review every year, you can’t get to every one every year.”
Technology makes it a little easier all the time, with aerial photography being one of the key tools used today. The photography is used to identify additions to a home, new structures and even swimming pools.
“If you had a 2,000-square foot rectangle home last year, and this year it is a 2,000-square foot rectangle home with a garage attached to one side of it, they’ll identify that garage that’s an improvement to that property, then we can see it on that photograph,” Lankford said. “We can even measure it from the photograph for accuracy.”
The technology and additional information is not just to assist appraisers, though. Lankford said transparency is critical to him and WCAD has made many changes to its online presence in recent years to help property owners gather information.
“I think it is a huge portion of what we do,” he said. “Throughout the years, I have seen appraisal districts hold information very close to the vest and not want to share that with the public. I’ve taken an approach to put as much out there as possible. Transparency is often an overused word when it comes to local government, but I believe in it strongly.”
The website has videos, showing step by step how the process of valuation works, what the role of the appraisal district is and how to go through the protest process.
In 2017, WCAD received a record 52,000 protests.
“We are anticipating this year it will be somewhere close to that,” he said. “The increase (in valuation) this year overall wasn’t quite as dramatic as it was last year, so I anticipate being right at or slightly below where we were last year in the number of protests.”
Lankford said property owners should know their rights to protest and shouldn’t hesitate to ask questions or file a protest, but they should do their homework first to avoid spending a lot of time and energy in the process only to find the valuation might not change.
“It is real important to decide first if we’re doing the job we should be before you push that button to submit a protest, to be sure it is worth your time to go through it,” Lankford said. “If you do have to come in, it is a long process to get through.”
Much of the data needed to make the decision can be found on the page once a property search is conducted through the WCAD site.
Property owners can find information specific to their property, the neighborhood, and the sales within the neighborhood.
While sale prices for the homes that have turned over won’t show, a call to a real estate agent can often get that information.
“Get that sale price, and then decide if its worth your time to protest or not,” Lankford said. “If the homes are selling for the same as the value on your home, it’s probably not worth your time to go through the process and just be told no. However, if you look at those sales and it says your home is higher than those others the next thing to think about is what is different about your home?”
If the answer is yes, a protest is worth moving forward with, then Lankford said filing it online is the most efficient way.
“It is very simple and on our website,” he said. “That makes it very simple, you don’t have to mail anything, you don’t have to wait. The sooner you get it in the better, that way you can get a hearing scheduled.”
Lankford said that though the goal is to get appraisals right the first time, everyone at WCAD understands the importance of customer service and going through the process with concerned property owners to ensure the value is correct.
“If you take a job (at WCAD), and you get upset by protests, then you probably shouldn’t have a job here,” he said. “It is really important for our staff to treat everyone who comes in the door very professionally. I look at this more as an educational process when people come in rather than an adversaril process. Many people just don’t know how the job is done.”
And if tax considerations are driving the desire to protest valuations, Lankford hopes everyone remembers that later in the year, the opportunity will be available to take part in the tax rate discussions across the county as well.
“People are unaware that they have the same ability to go to a tax rate hearing as they do to go to a protest hearing on their valuation,” he said. “I encourage people that it is a civic duty to be involved in both parts. If you feel the taxes are going too high and you are going to be priced out of your home, make sure you get involved not just with your valuation but go to the tax rate hearing as well.”
Values across the Liberty Hill area are up again in 2018, in most neighborhoods an average of five to nearly 15 percent. Of seven neighborhoods surveyed, Riverbend Oaks was up the most from 2017 at 13 percent.
A survey conducted by The Independent looked at four random homes in seven area neighborhoods to determine an average market valuation and average increase in recent years. The survey did not account for home or lot size or additional amenities and is meant only to show general increases across the neighborhood.
A survey of 24 properties across six area neighborhoods showed an average increase in market values of 55 percent, with the average home value of $192,268 in 2013 increasing to $298,484 in 2018.
The increases have slowed down in recent years, with the increase since 2015 sitting at 20 percent for the same group of homes.
According to City of Liberty Hill Finance Director Michel Sorrell, the initial report of property valuations in the city limits from WCAD showed an increase of $47 million over 2017 to $262 million total. The 2018 number is prior to protests so will likely decrease some by the time certified rolls are provided in July.