Dallas County residents feel the pinch as property values ​​soar

Connie Ramirez has regrets.

She sold her godparents’ house in Trinity Groves earlier this year, and she wishes she didn’t have to.

“It hurts because my godfather died, but a few days before he called and said, ‘I’m giving this to you’ and he begged, ‘Please don’t sell. It hurts because I went against his word,” she said. “I had to sell it, because of property taxes. I couldn’t afford it. »

The house was valued at less than $80,000 when she inherited it in 2013. Ramirez sold it that year for $174,000. During that time, property taxes went from about $650 to $7,000, she said.

“They keep going up. There is no light at the end of the tunnel,” Ramirez said.

Many Dallas County property tax bills will likely rise again this year, with the increases largely tied to the continued steep rise in home prices. The Dallas Central Appraisal District released its annual tax estimates on Tuesday, showing real estate market values ​​have risen an average of 24.5% over the past year.

The market value of Dallas County housing stock has grown from $179 billion in 2020 to $187 billion in 2021 to $230 billion in 2022.

Commercial properties across the county have grown from $151 billion in 2020 to $157 billion in 2021 to $180 billion this year.

District spokeswoman Cheryl Jordan said it was one of the biggest increases in market values ​​in recent history.

“It’s been a huge year,” she said.

Across the country, home prices are rising, and the Dallas-Fort Worth area is a prime market. The Dallas Morning News reported this month that the median sale price for a DFW home was $425,000.

Home prices in the area rose 30.8% year-over-year in May, according to the latest S&P CoreLogic Case-Shiller Index report. Only Tampa and Miami had higher price gains than D-FW.

Property taxes are determined by the appraised value of the property. Taxing authorities such as county and city governments and school districts tax a percentage of property value.

The full impact on property tax bills won’t be fully realized until September, when cities, school districts and other taxing entities determine new tax rates to comply with the recent US law. State aimed at curbing the growth of property taxes.

But experts say most tax bills will continue to rise.

The increase in market value from a year ago varied among the 31 cities in Dallas County.

Most cities experienced an average market value increase of between 11% and 25%. Unincorporated Dallas County and the City of Dallas would both have seen an average increase in market value of nearly 18%, the appraisal district said.

While smaller towns in South County have seen the biggest increase in market value, Ken Smith of the Revitalize South Dallas Coalition said that market hurts South Dallas the most.

“We move low-income people to South Dallas, and most of the landlords here are older and on that fixed income,” Smith said.

Ramirez’s permanent residence is a few blocks from the Bishop Arts District. The 63-year-old fears she will be evicted from her home in a few years. She holds her breath, hoping the property taxes won’t go over her budget.

“But in the next few years, I see it happening,” Ramirez said.

Outside of Dallas, many surrounding towns in southern Dallas County are seeing their market values ​​increase by more than 20%.

Glenn Heights City Manager David Hall said every town wants to see growth and an increase in home value, but there is a tipping point.

“From a financial point of view, it is obviously unintentionally detrimental to some people that the amount of tax they will have to pay is going to increase. In some cases, perhaps by forcing them to choose what to pay. In some cases , maybe to a point where they can’t afford to make the payment,” Hall said.

His city saw its market value increase by 34%. Census data estimates the median income in Glenn Heights to be $72,695.

Hall said the average home price has doubled over the past decade. Glenn Heights holds homes worth $100,000 to $600,000, he said, but new developments only build one side of the scale.

“We’ve seen bigger houses generally built, more expensive houses,” he said.

Cockrell Hill saw its market value increase by 34%, according to data from the appraisal district.

City Manager Bret Haney acknowledges that Cockrell Hill has some of the most affordable homes in the area, but he’s started seeing new homes with a starting price of $400,000. The U.S. Census Bureau reported that the city’s median income in 2020 was $58,137.

The biggest changes to Cockrell Hill have been the disappearance of vacant land, Haney said.

“We have the key word – gentrification – happening,” he said.

He said home prices equivalent to Cockrell Hill years ago can only be found outside the county now. US Census Bureau data shows a net population loss for Dallas County over the past year, while North Texas as a whole has grown.

Haney and Hall said cities are in dire straits. Limited by a state law that caps annual tax revenue collection at 3.5% annual growth, cities won’t benefit from the market swell as much as people expect.

“Cities are not cashing in. It’s not a bargain,” Hall said. “We are all sensitive to what will happen to our residents.”

Dallas’ Central Assessment District also assesses sections of cities divided by county lines, so some cities such as Ferris and Wilmer have the greatest disparities in the report, Jordan said. The 2022 market value of Ferris County’s 23 commercial parcels of Dallas County property increased 5%, while Wilmer’s 693 parcels triggered a 69% increase due to new subdivision, Jordan said.

More construction took place in the past year than in 2021, with growing cities in southern Dallas County seeing the bulk of new businesses and new homes. More than 20 million square feet of space is under construction in South Dallas, which has become North Texas’ most active industrial development market.

Wylie saw a 28% increase in new builds over last year, followed by Wilmer with a 19% increase and Sachse with a 10% increase.

The inflated market value is causing some owners to take matters into their own hands. More homeowners than ever have challenged the value of their homes, upset by huge increases in property tax bills.

Nearly 202,000 landlords have filed assessment protests this year, breaking the record set in 2020 with 24,000 appeals, Jordan said.

“The market is so up, and we need to increase the value, and people are protesting,” she said.

Toby Toler helps homeowners protest property tax assessments. He worries about the market’s impact on property tax bills, saying huge tax increases in recent years have hurt family budgets.

“Our clients have been blindsided by recent tax increases,” he said.

Some governments such as Dallas County and the City of Dallas have increased tax exemptions, providing some relief.

Dallas County added an additional $31,000 tax relief to its 2008 tax exemption, raising it to $69,000 for elderly and disabled homeowners. The county collects about $638 in taxes on an average home value of $350,000. The June exemption provides an additional $70.66 in tax relief to these homeowners.

Dallas City Council last month approved an 8% increase in the amount senior homeowners and people with disabilities can exclude from their property tax assessment to $115,500 from the current exemption of $107,000. .

With federal interest rate hikes and talk of a recession, some real estate experts say there has been a cooling in the D-FW housing market. June sales were down 8% from a year ago, according to Texas A&M University’s Texas Real Estate Research Center and North Texas Real Estate Information Systems.