Real Estate Ups and Downs

First-time Texas homebuyers bear the brunt of record low inventory

Good news if you're planning to sell your home, not so good if you're looking to buy: According to the Texas Quarterly Housing Report, even though median home prices were up statewide in the first quarter of 2015, housing inventory hit an all-time low.

In Dallas specifically, home sales in 1Q2015 were up 1.82 percent over the same period last year, and the median price increased nearly 12 percent — from $192,600 to $215,700. Available homes for sale, though, have dropped 18 percent, to just 1.8 months of inventory.

In Fort Worth, sales were up 4.43 percent, median price was up 13.62 percent and inventory plummeted 25 percent from first quarter of 2014, to 2.1 months. Collin County had very little change in home sales, but there isn't that much there to buy: Inventory dropped more than 13 percent, down to only 1.3 months of inventory.

Across Texas, the 1Q2015 numbers look like this: Sales were up a little more than 4 percent; the median price went up nearly 8 percent; and inventory was down almost 9 percent, to 3.1 months, a new record low.

“The first quarter of the year is typically a slow period for home buying and selling, so we were thrilled to see strong home sales gains statewide in the first part of 2015,” says Scott Kesner, chairman of the Texas Association of Realtors, in a release.

The news isn't entirely rosy if you're a first-time homebuyer, because low inventory and high prices can spell trouble down the road.

“Homes are being built as quickly as possible, yet most are not in the price range where inventory is needed most – the entry-level market,” says Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. “Interest rates are still low, but tight lending standards, rising home prices and slim inventory have created a tough market for first-time homebuyers.”

You can read the first-quarter report in its entirety at the Texas Association of Realtors website.

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Prep to Protest

Texas homeowners have one month to protest and lower their property taxes

Jessie Street home front Austin tour of remodeled homes

Photo courtesy of Austin NARI Tour of Remodeled Homes

Here's how Texans can correct their property taxes when they feel their home appraisal is too high.

Texans who are unhappy with their home appraisal this tax season have a chance to do something about it if they get the process going in the next month. The deadline for most people to protest their property valuation — thus lowering their property tax — in Dallas County is May 15.

If you haven't done it before, don't worry: There are steps to follow online and companies that do it for you at no cost unless you save money.

Why protest?
Texans pay the 7th highest property taxes in the country, according to personal finance website WalletHub. If your county has overappraised your home, you are paying more than you need to in property taxes.

Protests are especially important and easy for people who closed on their homes in the past year, because the value of the property upon sale is accepted as the true value of the property. This assumes that if the property were worth more, it would have sold for more. The more recently the home sold, the more likely it is that homeowners haven't meaningfully altered the property since the purchase.

Submitting a protest is free, and there is almost no risk in doing so. The Appraisal Review Board is prohibited from raising the property value in a hearing. Homeowners may decide it's not worth their time if their appraisal barely changes and they don't save a significant amount of money.

When to submit
Most homeowners whose home has increased in value according to the county should have received a Notice of Appraisal in the mail by now. It tells them how much the county believes their home is worth this year. To check online, homeowners can search for their property at dallascad.org.

The deadline to submit a protest is May 15 or 30 days after the notice is mailed — whichever comes later. However, the notice may have been lost or delivered to the wrong place, so it is important to check before May 15 just in case. Notices are also sent later for property owners whose primary residence is somewhere else.

There are lots of ways homeowners can try to prove their home value has not increased, or even that it has decreased due to damage on the property. Whether the evidence is photos of damage or "comps" around the neighborhood — comparing the home's value to others of a similar quality in the same area — homeowners submitting their claim themselves should be prepared to meet with an appraiser or even a review board.

Set it and forget it
Homeowners who don't want to deal with the paperwork, phone call, or hearing can hire service to protest on their behalf. For them, savings are essentially passive income; the service uses data from past years and the surrounding neighborhood to argue the client's case. It is easy to find a service that works on a contingency fee, so the cost is only a portion of the successful savings. Ownwell is a popular choice, but it's not the only one.

Finally, homeowners should also make sure they're not leaving money on the table by applying for a homestead exemption. This is available to people who own the homes they live in, as opposed to people who own homes and rent them out to others. It subtracts $140,000 from the total valuation of the home before applying the tax rate.

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