Preliminary property values rise in most of Tarrant
05/24/2014 4:01 PM
05/24/2014 4:02 PM
The bad old days of the recession appear to be in the rearview mirror.
The recovery is in full force across Tarrant County, according to preliminary values from the Tarrant Appraisal District.
Almost every segment of the real estate market is seeing increases, and just about every part of Tarrant County is showing an uptick in values. Only a few cities had no significant gains.
Overall, assessed property values are up 6.7 percent across Tarrant County.
But the Tarrant Appraisal District and many area cities caution that these values will likely drop as some homeowners and commercial property owners protest their valuations.
Chief appraiser Jeff Law expects about 70,000 of the 1.4 million tax accounts in Tarrant County to challenge their appraisal. Property owners have until June 2 to file a formal protest, which they can do online at www.tad.org.
He has advised cities and school districts to assume about a 2 percent drop from the current valuations, though he doesn’t expect that significant a drop.
“I can’t really tell you how much to expect things to change but I would say this year, things are better than healthy,” Law said.
Home prices are also helping drive the increases. Residential values are up 8 percent across the county.
There has been some new construction with the addition of 5,534 residential and 201 commercial accounts.
The gains reflect the pull of the local economy bringing more people to the area, Tarrant County Administrator G.K. Maenius said.
“Quite frankly, it’s an up market and this is reflective of that,” Maenius said.
But real estate agent Lucy Puniwai, who works in the Alliance corridor, said many clients have been upset with TAD as their appraisals have jumped by $25,000 to $30,000. She said values are up and multiple bidders are often vying for homes but she believes that TAD is overreaching with its appraisals.
“The people that have contacted me to protest taxes have recently purchased homes,” Puniwai said. “Their appraisals just jumped through the roof. I don’t believe the appraisal system is fair. There’s just no consistency or balance in the system.”
This year, TAD increased the value on about 260,000 existing accounts. Of those, 166,000 had a jump from 5 to 10 percent; 63,000 increased by less than 5 percent; and about 31,000 went up by more than 10 percent.
Among commercial properties, apartments increased 25 percent, office space jumped 20 percent, retail climbed 15 percent and warehouses had a 10 percent increase.
“You just have a lot of retailers that have become active again and DFW is an attractive market to a lot of retailers,” Makens said.
Among apartment complexes, the higher-end properties — those that are considered Class A and Class B — have had the biggest increases.
“For investors, it has become a lucrative investment,” Law said. “A lot of apartment complexes are selling; values are going up. We're seeing a lot of increases across the whole county, particularly in Class A properties.”
There was also a big increase in mineral interest accounts, from 404,000 to 719,000. The overall value increased by $500 million from $2.4 billion to $2.9 billion.
Fort Worth expects another budget shortfall
The preliminary TAD appraisals are important to local governments because they use these numbers to start building budgets for the next fiscal year. City officials say that the numbers are encouraging and optimistic, but that they are being cautious.
Fort Worth, for example, had a 7.4 percent increase in net taxable property value, which is at $43.4 billion in the preliminary report.
Still, the city’s chief financial officer, Aaron Bovos, said Fort Worth is projecting only a 2.9 increase in revenue from property taxes and a 5 percent in the sales taxes for fiscal 2015. He expects the city to have another shortfall in the upcoming budget.
“From a historical perspective, where we sit today is much better than where we have sat in prior years. There really isn’t even a comparison,” Bovos said, but he added that they are “still talking about budget reductions.”
He asked each department to come up with a 2.8 percent reduction in their budgets. Based on fiscal year 2014, that is $16.4 million in reductions for the general fund. In a “balancing act,” he also asked departments what they would do with more money.
Last year, the city initially faced a $50 million shortfall, which was bridged with sustainable cuts, including jobs, increased property and sales tax revenue, and use of one-time budget savings.
“I feel very optimistic about the revenue forecast. Does that mean we are throwing caution to the wind? No, it will never mean that for a financial planner,” Bovos said.
The city also dangled the potential for 3-5 percent raises for general employees in 2015 if it found $5 million in savings through the year to fund it. General employees have received one raise in the last five years, in fiscal 2012.
Bovos could not say whether the raises will be included.
“The 2015 budget is still under development and raises are under consideration,” Bovis said. “They are part of the goal and part of the financial plan, but we are still working on having all those pieces to be able to solidify what that looks like.”
“When we make a decision for 2015, we need to make sure that decision is sustainable for a five-year forecast,” he said.
Bovos said the city’s approach toward the fiscal 2015 budget is “a little more comprehensive than what I know Fort Worth to have done in the past,” with careful attention paid to five-year projections.
He said the recommended budget will be presented to the City Council on Aug. 12.
Arlington numbers ‘encouraging’
Arlington’s taxable values, currently $19.2 billion, rose about 3.3 percent over last May, which is what officials had projected. The city had “encouraging” growth in residential, commercial and mineral values across the board, Budget Director Mike Finley said.
“Our tax base is on track with what we expected,” Finley said.
The Viridian Management District, site of the 2,300-acre master-planned Viridian development in Arlington, had an 84.5 percent gain from a year ago. While property values are soaring in that neighborhood, it is also simply a sign of new construction.
The number of accounts in Viridian grew from 539 to 817.
“You’re taking a small area where a lot of homes have been built,” Law said. “A lot of that was vacant land and now it’s homes and other new stuff. They’re adding things out there all of the time.”
For some smaller communities, the impact of new businesses can be significant.
Haslet, with its nearness to the sprawling Alliance development in far north Fort Worth, has seen its property values jump a whopping 35.6 percent, most of which came from the arrival of theAmazon fulfillment center.
“Amazon — that pretty much says it all,” said Debbie Maness, Haslet’s finance director. “To see an increase is really good but I will say I’m pretty conservative and we won’t really know its impact until we get the final number in July.”
The arrival of Amazon is another sign of growth in far northern Tarrant County. Last year, Alliance developer Hillwood reported to the city of Fort Worth that the development had a $50 billion impact on the North Texas economy since it began in 1989.
In North Richland Hills, there are also signs of recovery.
The city issued construction permits for 189 single-family homes last year and had new commercial redevelopment along Northeast Loop 820 with the new Floor & Decor, Taco Cabana and Quick Trip. Sandlin Homes is also planning a 192-lot subdivision off Iron Horse Boulevard, Assistant City Manager Karen Bostic said.
“It’s a positive and welcome sign for our local economy and we are hopeful that we are finally returning to a pattern of slow and steady positive growth,” Bostic said.
Red-hot housing market
In some parts of Tarrant County, the stories of buyers lining up to buy homes are true.
Fort Worth real estate agent Scott Bailey was showing a home on Hillcrest Street in Fort Worth that was not entered in the Multiple Listing Service.
“I’ve got one that everybody just walked through,” said Bailey, who had more showings scheduled that day.
“I think inside the loop [locations within Loop 820] it is fantastic right now from an agent’s point of view,” Bailey said. “If you go outside the loop, there are cash buyers buying and paying cash and then turning around and leasing them out. There are good deals for investors in those areas that are saturated.”
Last month, a real estate investment trust with an Arlington address bought one of his listings along Meadowlark Drive in far south Fort Worth, shortly after buying another home in the same block.
By the time the buyer closed on Bailey’s listing, a “for lease” sign was already up in front of the neighboring house.
A few areas have seen more modest gains, including Edgecliff Village, the Everman school district and Dalworthington Gardens.
“Some of these smaller towns don't have the land mass to bring in new industry or have the available land for new housing,” Maenius said.
Protest deadline approaches
Time is running out to file a protest. Tarrant County property owners have until June 2.
“If you’re thinking about protesting, I would go ahead and file a protest,” Law said. “That way you are protecting your right to protest. You can always drop the protest later if you choose to do so.”
Once a protest is filed, residents can also call the appraisal district and talk to an appraiser about dropping their valuation, but Law warns that values are going up in most areas.
“Right now, the data supports that values are up,” Law said. “We may not necessarily lower a value but it doesn’t hurt to talk to an appraiser.”
Some taxpayers have complained that appearing before the appraisal review board can be daunting.
Law said property owners need to do their homework before coming before the review board.
“It shouldn’t be an intimidating process, but they do need to come prepared,” Law said. “If they think their value is too high, they may need to talk to a real estate agent. Look at listing prices and advertisements. Also, bring in photographs. There may be something we don’t know about your property. We may not know it only has one bathroom instead of two. That’s the kind of thing that can lower your value.”
But homeowners need to accept that values are currently on the increase.
“Right now, I think there's a huge demand for residential properties and the supply is simply not there.”
Staff writer Susan Schrock contributed to this report.
Bill Hanna, 817-390-7698
Caty Hirst, 817-390-7984
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