McLennan County homeowners told to expect average tax appraisal increase of 30 percent

WACO, Texas (KWTX) - McLennan County Appraisal District Chief Appraiser Joe Don Bobbitt has a cautionary message for area homeowners before appraisal notices are mailed out next week: sit down before you open them because appraisals are going up an average of 30 percent over last year.

Bobbitt and the Texas Association of Appraisal Districts want homeowners to know that there are a variety of factors in play, including a scarcity of homes for sale, that have caused property values to swell by 20% to 50% across the state. They also want to remind taxpayers of appraisal districts’ mandates to appraise property as closely as possible to fair market value.

Bobbitt is accustomed to shouldering the brunt of taxpayers’ wrath, and his office is gearing up for a record number of appraisal protests for the second year in a row. Last year, his office fielded 15,000 protests and Bobbitt expects around 17,000 this year.

“The main thing I am trying to get across to people is that appraisals are going to be significantly higher than they have been in the past,” Bobbitt said. “We are trying to stay up with the real estate market. The comptroller’s office holds us to be within 5 percent of fair market value, and the way they hold us accountable is by taking money away from the school districts.”

According to preliminary estimates released by Bobbitt’s office, residents in the Waco school district can expect a 29% increase in property values, those in the Midway system a 23% increase, China Spring a 37% increase and Lorena an increase of 33%.

Those in the West school district can expect an estimated 35% hike, Robinson school residents a 32% increase, La Vega school district residents a 35% percent increase, those in Mart a 42% hike, Crawford 47% and McGregor 25%, MCAD estimates show.

Bobbitt said most protestors last year earned some reduction in their appraisals, but was quick to add the average appraisal went up 15% last year opposed to the estimated 30% this year. That meant those with homestead exemptions, which result in a 10% cap on the amount assessed values can increase, could actually see a difference in their tax bills if they won at least a 6% reduction, Bobbitt said.

This year, protestors would have to convince MCAD officials or an appraisal review board to reduce their values by 20 percent or more before they would realize a reduction in their taxes.

“I get to talk to 15,000 people who come and talk to me and say that their taxes are going up. But very few of those people actually show up for public hearings on the tax rate at the cities or school boards or the county,” Bobbitt said. “They are the ones who set the tax rates.”

Alvin Lankford, president of the Texas Association of Appraisal Districts and chief appraiser in Williamson County, said in a statement that the state budget passed in the most recent legislative session estimated property tax revenue collected over the next two years would increase by 6%.

“Considering for many of us our home is our largest investment, an increase in market value can be considered a blessing,” Lankford said. “However, many people equate an increase in market value to mean an equal increase in property taxes, which is simply not the case. An increase in property taxes is sometimes needed to keep the police and fire departments adequately funded, along with our school hospitals and other vital serves for our communities.” While angry taxpayers might disagree, many Central Texas taxing entities, buoyed by increased property value appraisals the last few years, have been able to lower their tax rates or keep the status quo while still generating the same or more in tax revenues.

Bobbitt said those who disagree with their property appraisals can file protests at //mclennancad.org/efile for faster service and to review evidence specific to their property. Bobbitt said providing evidence of poor condition or deferred maintenance issues are the most effective ways to reduce values.

The deadline to file appraisal appeals is May 16 and hearings will start soon after that, Bobbitt said.

As the nation enters its third year shrouded by COVID-19 , homebuilders continue to bounce back from pandemic-related reductions in housing starts, labor force problems and supply chain bottlenecks, officials say. Those things, coupled with cash-infused investors moving to the state in droves and a shrinking list of homes available for sale have contributed to supply-and-demand issues that have driven up home prices.

Frances Pool, senior real estate specialist at Coldwell Banker Apex, Realtors, said there are 333 current home listings on the multiple-listing service in McLennan County. Less than a decade ago, there would have been an average of 500 homes on that list, she said.

“It is the hardest it’s ever been right now because there are not enough homes,” Pool said. “It is very difficult to find a decent home in McLennan County for under $150,000. It is especially difficult for young, first-time homebuyers because they have student loans and they are getting priced out of the market by cash buyers who are buying these homes to rent back to these people.”

According to MCAD estimates, the averaged market value of a home in McLennan County will increase from $218,225 to $284,937, while the average market value of a home in Waco will increase from $210,272 to $270,732. The market value of the average home in Woodway will increase from $320,92 to $404,136, in Hewitt from $227,582 to $288,535 and in China Spring from $274,634 to $375,904.

Despite the relative sparsity of homes for sale, 833 houses sold in Waco in the past six months and 566 houses sold in the six months before that, Pool said. The average time on the market for homes priced from $200,000 to $500,000 is 29 days from listing to close, while homes stayed on the market an average of 23 days in the previous six-month period.

Pool said about 35 percent of homes in the Waco metro area sold for more than asking price, and the average sale represented more than 98 percent of the asking price. It’s not uncommon in today’s market for budding homebuyers to get into bidding wars and for homes to sell for more than the original listing price, she said.

One home Pool tried to sell in Woodway last year had 14 offers, she said. It was a definite fixer-upper listed for $190,000 and it sold for $205,000 to an investor who planned to rent it out, she said.

Pool echoed Bobbitt in advising disgruntled taxpayers to take their beefs to the local taxing entities.

“If you are concerned about your property taxes, go listen to the county commissioners, go listen to the school board, go listen to the city council,” she said. “If you are concerned about taxes, people need to go find out where their money is spent. I feel McLennan County and its entities do a good job managing our money. But if you are concerned about your taxes, that is where people need to educate themselves.”