Declines in the sales and pricing of homes throughout the greater Houston area eased in March, according to new monthly data released late April by the Houston Association of Realtors. Overall March property sales fell 18.9 percent and sales of single-family homes dropped 16.1 percent versus March 2008. From February to March of this year, however, overall property sales volume increased 26.1 percent while sales of single-family home rose 27.8 percent as the spring began, a period that traditionally produces higher sales volume than the fall and winter months.

At $145,000, the March single-family home median price – the figure at which half of the homes sold for more and half sold for less – fell 4.4 percent year-over-year, but still attained its highest level of 2009. When foreclosures are removed from the analysis, the median price of traditional single-family homes was flat at $168,000. The average price of a single-family home in Houston dropped 6.0 percent last month to $193,880 compared to March 2008. The median and average price declines mark the smallest drop since levels first turned negative last October.

While sales of foreclosure properties, which typically sell below market prices, continued to weight home prices last month, the effect was milder than in previous months. In March 2009, foreclosures made up 24.5 percent of all single-family home sales in the Houston area compared to 34.0 percent in January and 28.0 percent in February. The median price of March foreclosure sales reported in the MLS tumbled 11.3 percent from $94,700 to $84,000 on a year-over-year basis.

Sales of all property types in Houston for March totaled 5,022, off 18.9 percent compared to March 2008. Total dollar volume for properties sold during the month was $940 million versus $1.2 billion one year earlier, a 23.2 percent decline.

Demand for rental properties rose again in March, with leases of single-family homes up 4.3 percent on a year-over-year basis and leases of townhouses and condominiums up 26.6 percent. Leases of high rise units rose 82.0 percent, a figure that tends to be more variable because of the comparatively small number of units involved.

“It’s too soon to predict exactly when the Houston real estate market will be in healthier territory, but the recent moderation in sales and pricing trends is an encouraging sign,” said Vicki Fullerton, HAR. “For consumers with good credit, this is an outstanding time to buy a home in the greater Houston area because mortgage interest rates are at 50-year lows and there’s a plentiful supply of reasonably priced housing inventory. First-time home buyers also have until December 1st to take advantage of an $8,000 tax credit that does not require repayment,” she added.

Source: Houston Association of Realtors

The Texas housing market is likely to be one of the first to recover when the nationwide building slump is over, according to Joe Robson, chairman of the National Association of Home Builders.

Dallas and Texas in general have held up very well during this recession. "All over Texas, they've done a pretty good job of keeping housing inventories in check."

The supply of unsold new homes in North Texas is less than half what it is in hard-hit markets in California and Florida. But that doesn't mean the housing industry here hasn't suffered.

Single-family home starts have fallen more than 60 percent since the peak in 2006. And several prominent homebuilding firms in the area have gone out of business.

Statewide, the Texas Association of Builders estimates that it has lost a couple of hundred company members.

"We've seen some fallout and are likely to see some more," said Texas builders president Ron Connally of Amarillo. "There are a lot of good builders out there who haven't done anything wrong who have been caught."
The National Association of Home Builders has seen its membership decline by almost 50,000.

The builders also said that the recently enacted $8,000 federal tax credit for first-time homebuyers has caused a spike in their business.

"In the first two months it's been in existence, about 600,000 homebuilders across the country have taken advantage of it," Robson said. "Certainly it's working in Tulsa, where I'm from, and in Texas.
Robson said he's optimistic that the U.S. housing downturn will bottom out this year, in part because of low mortgage rates and incentive programs aimed at luring consumers back to the market.

"The affordability factor is higher than it's been since statistics have been held," he said. "We are at historic lows on mortgage rates."

Sources: Dallas Morning News and Real Estate Center at Texas A&M University

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Why are property taxes so high?

Very simply, Texas does not have an income tax from which to derive funding for local services – fiscal support for things like public schools, police service, fire protection, and road repairs must come from other sources. Property tax is the largest of these sources.

In mid-2007, the Texas Association of Realtors conducted a survey of Texas homeowners. Austin-based Baselice & Associates interviewed homeowners throughout Texas to find out what issues worry them. The results of the survey indicate over half of all Texas homeowners rate the issue of property tax and appraisals as a major concern.

In Texas, there are three main players in the property-tax game – the appraisal district, local taxing bodies, and an appraisal review board (ARB).

The appraisal district is responsible for assessing the value of your property. The local taxing bodies are school districts, counties, cities, and other special districts. These entities decide how much money they need to provide their services. Property tax rates are set according to these budgets. The ARB is a group of citizens authorized to resolve disputes between taxpayers and the appraisal district.

Each year between January 1 and April 30, the appraisal district makes value determinations for all taxable property within its boundaries. During this time, they also process exemption applications and other tax relief and property renderings.

The tax itself is calculated by multiplying the taxable value by the tax rate for a given entity. The taxable value may be different from the market (appraised) value if the property qualifies for an exemption or benefits from the appraisal cap.

As an example, let’s consider a homestead that was appraised at $100,000 last year. This year, the property has been reappraised at $140,000. However, Texas law states that the assessed value can only be increased 10% per year for homestead properties, for a maximum taxable value of $110,000.

There are also exemptions that can reduce the taxable value of your property. The most common exemption is called the homestead exemption, which is available to all Texas homeowners and further lowers the taxable value for school tax purposes (for homeowners’ primary residence only). Other statewide exemptions are available, as well, such as those for homeowners age 65 or older and homeowners with disabilities; each of these exemptions reduces the taxable value by $10,000, but you may only use one of them.

As a homeowner, you reserve the right to challenge your appraisal if you believe your property value is too high or if you were denied an exemption.

To start the process, you must file a notice of protest. Official forms are available, but you’re not required to use one. This notice must include your name, the property in question, and that you are not satisfied with the decision of the appraiser. The 2008 deadline was June 2, or 30 days after the notice of appraised value was mailed to you, whichever is later.

The ARB must notify you at least 15 days in advance to let you know the time and place of your hearing, but you can actually contact the appraisal district and attempt to resolve the issue without appearing before the ARB.

When you appear before the board, keep your protest simple, emotionless, and fact-based. Provide specifics – pictures and other documents are excellent evidence. Remember that the ARB does not have any say in tax rates, inflation, or local politics – they may only consider the valuation of your property as reported by the chief appraiser. They are an independent, neutral body composed of your fellow citizens and are not beholden to the appraisal district. In fact, the chief appraiser has the burden of proof in these hearings, so if you present a solid case, you have a good shot at winning.

If you do not agree with the ARB’s decision, you may take your case to district court or, in the case of residential properties valued at less than $1,000,000, to binding arbitration.

Source: Texas Association of Realtors

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