HCAD Appraised Values 2015

[JJxvi]

The owner on January 1 is who pays the tax.  You only paid the tax for them as a contractual agreement with the previous to owner to clear the title.  You got the benefit of their homestead for that one month, but you will not get capped based on their value for 2015.

 

As an example.

 

Lets say a house appraised by HCAD had a market value of $200,000 and that the owner's capped value was $175,000 on January 1, 2014.  Automatically that owner owes tax based on $175,000 which will be due by the end of January 2015.

 

You buy the house for $500,000 in November 2014.  You agree to pay the old owners taxes (so that you as the new owner can make sure they will be paid so you don't lose your house to the lein) in exchange for them paying you 11 months prorated portion at closing.  You pay taxes based on $175,000 in January 2015.

 

On January 1 you become qualified for a homestead exemption for tax year 2015 and apply.  You are a new homeowner of this property and have never had a homestead exemption on it before.  Your appraised value and market value will probably be $500,000 and will be equal to each other for sure.  The cap only applies if YOU had a homestead on the property last year. You did not, the other guy did.

[JJxvi]

As for them finding out the sales price, if your home was listed in HAR/MLS the CAD will eventually know it.  The listing agent will have popped in the sales price when they closed their listing and it will be searchable to someone who has access to that data.

[Highway6]

I understand what you are saying about the cap now.... I thought it applied to all real property, not just those with homestead exemption.. but I see you are correct sir on that one.

 

However..

 

Market value is based though on the "Market" value.. of the market or the neighborhood.. not the individual property.

If all the houses in the neighborhood are going for 200k.. and I overpay at 500k.. I won't be paying taxes on that 500k.  IT means I was stupid to buy that house for that price...

Will my 500k jack with the market value of the rest of the neighborhood and artificially inflate it.. perhaps.

Paying too high for a property or getting a great steal doesnt have Direct bearing on what HCAD deams the market value of your home is.

And yes.. the MLS sale values are available..  but the county uses those to come up with valuation at the market level.. not individual.

 

 

But I guess i have answered by original question....  Based on all sales in my neighborhood..  my market value has gone up, like all my neighbors.. roughly equally...  And BECAUSE I'm a new owner and not protected by the homestead exemption.... the one device available to keep my apprasial value artifically lower than market value.. is not available to me.

 

So JJ.. while I dont agree with eveything you are saying..  you have helped me and I did learn one thing new.. so thank you, sir.

 

 

 

 

 

 

 

[jt16]

What was the SF on the listing when you bought it. Is the new SF actually wrong, or was the old number wrong?

Either the banks appraisal is wrong (which agreed with hcad when I bought the house) at 2611 sq ft, or hcad found 580 unknown sq ft

[Marksmu]

Either the banks appraisal is wrong (which agreed with hcad when I bought the house) at 2611 sq ft, or hcad found 580 unknown sq ft

 

They do this all the time.  The appraiser measures the outside, and just creates a magical number whether its right or wrong.  Correct them and your appraisal will drop drastically.  HCAD calculates their value on a $/ft basis.

 

My new house they had the square footage wrong by more than 1,700 sqft.  When I corrected them by bringing the floor plan submitted to the city it dropped my appraised value by the price of a small house.  They had attic space as finished space b/c there were windows in the attic, and b/c I used foam insulation and the attic is technically conditioned space.  But its still attic, and they corrected it.

[jt16]

They do this all the time.  The appraiser measures the outside, and just creates a magical number whether its right or wrong.  Correct them and your appraisal will drop drastically.  HCAD calculates their value on a $/ft basis.

 

My new house they had the square footage wrong by more than 1,700 sqft.  When I corrected them by bringing the floor plan submitted to the city it dropped my appraised value by the price of a small house.  They had attic space as finished space b/c there were windows in the attic, and b/c I used foam insulation and the attic is technically conditioned space.  But its still attic, and they corrected it.

 

Thank you for your response.  My blood pressure is dropping enough to add years to my life.

 

[JJxvi]

Either the banks appraisal is wrong (which agreed with hcad when I bought the house) at 2611 sq ft, or hcad found 580 unknown sq ft

 

The appraiser for the bank likely just went to HCAD to get his SF, because they really don't do their job.

 

What did sellers agent claim the SF was in the MLS listing when you bought the house?

[jt16]

The appraiser for the bank likely just went to HCAD to get his SF, because they really don't do their job.

What did sellers agent claim the SF was in the MLS listing when you bought the house?

This house has been listed by hcad and several appraisers at 2611 sq feet since 1963. I did a small kitchen Reno and now hcad lists it at 3241. It's a story and a half, so I assume the county took the outside upstairs and counted it all as liveable which half is attic/utility.

The appraiser for the bank likely just went to HCAD to get his SF, because they really don't do their job.

What did sellers agent claim the SF was in the MLS listing when you bought the house?

This house has been listed by hcad and several appraisers at 2611 sq feet since 1963. I did a small kitchen Reno and now hcad lists it at 3241. It's a story and a half, so I assume the county took the outside upstairs and counted it all as liveable which half is attic/utility.

[BBLLC]

Can anyone explain the logic (I know I'm stretching here) behind appraising land differently?  HCAD stipulates an "average" lot size for an area and assesses a $/sqft value.  If your lot is larger than the average, the amount in excess is typically assessed at 50%.  If your lot is smaller than the average they apply a multiplier that has no root in reality to increase the assessed value.  For example if you take two 25 ft lots at 3300 sqft each and build two shotgun houses on them the value of the land suddenly quadruples.  How is that fair and equitable?

[brian0123]

Anyone in the South Braeswood area get a notice yet? I haven't received anything in the mail and it shows pending online.

[JJxvi]

Can anyone explain the logic (I know I'm stretching here) behind appraising land differently?  HCAD stipulates an "average" lot size for an area and assesses a $/sqft value.  If your lot is larger than the average, the amount in excess is typically assessed at 50%.  If your lot is smaller than the average they apply a multiplier that has no root in reality to increase the assessed value.  For example if you take two 25 ft lots at 3300 sqft each and build two shotgun houses on them the value of the land suddenly quadruples.  How is that fair and equitable?

 

Do you know why developers buy large lots and subdivide them to build denser housing on them?  Its because it maximizes the value of the land that they purchased.

[OkieEric]

Still pending here as well.  It seems like areas to the west and SW (portions of River Oaks, West U, Braeswood) are still pending for some reason

[HoustonMidtown]

Still pending in EaDo also....

[BBLLC]

Do you know why developers buy large lots and subdivide them to build denser housing on them?  Its because it maximizes the value of the land that they purchased.

 

That doesn't explain the logic of taxing smaller and smaller increments of land at multiples to larger lots.  In fact, you are arguing that the opposite should happen.  Larger lots have more value per sqft because they can be subdivided.

[mollusk]

That doesn't explain the logic of taxing smaller and smaller increments of land at multiples to larger lots.  In fact, you are arguing that the opposite should happen.  Larger lots have more value per sqft because they can be subdivided.

 

The logic is that the land value is based upon X price per square foot.  Not all larger lots can be subdivided, usually because of deed restrictions or a prevailing lot size ordinance.

[BBLLC]

The logic is that the land value is based upon X price per square foot.  Not all larger lots can be subdivided, usually because of deed restrictions or a prevailing lot size ordinance.

 

Sorry but that is NOT what happens.  I'll use 1802 Harvard as an example.  This house sits on two 55x132 platted lots for a total square footage of 14,520 sqft.  The first 6600 sqft is assessed a $50/sqft value for a total of $330,000.  The "extra" 7920 sqft is assessed at $25/sqft for $198,000.  The market value of that lot is somewhere between $400,000 and $500,000 and could be split out with NO subdivision.  

 

1719 Ashland is a townhome that is assessed a land value of $78.60/sqft.  The fact is the $/sqft land value is adjusted in the exact opposite direction that it should be.  Larger lots have more value than smaller lots.

 

I have dozens of examples just like this.  

[JJxvi]

Larger lots have more value TOTAL. They do not have higher values per square foot, generally.  A house on two lots is not being valued as one lot with  house and one lot vacant.  It is valued as one oversized lot.

 

Go to the following address.  It shows HCADs land sales for last year with dates, size, and price/sf.  If you look for sales close to one another in both location and date with different sizes, you will see that in general smaller lots sell for more per square foot.

 

http://www.hcad.org/HearingEvidence/2014/SalesMAPS/p5359.pdf

 

 

 

[JJxvi]

You can change that number (5359) to whatever map number you want to look at to view the phenomenon elsewhere (Shady Acres is probably good with lots of sales and sales of different size if you type in the number to the west of this page)

[JJxvi]

On that page I gave you there is a good example right on the left hand edge of the page.  2 lots back to back on the corner of Lawrence.

 

The one facing 25th St is 6550 SF and sold in September 2013 at $45.80/SF ($300k).  The one directly behind it which had a warehouse on it and is being divided for townhomes facing 24th St was roughly six lots together at 39,300SF and sold in June 2013 for $22.77/SF (roughly $900k)

[BBLLC]

Larger lots have more value TOTAL. They do not have higher values per square foot, generally.  A house on two lots is not being valued as one lot with  house and one lot vacant.  It is valued as one oversized lot.

 

Go to the following address.  It shows HCADs land sales for last year with dates, size, and price/sf.  If you look for sales close to one another in both location and date with different sizes, you will see that in general smaller lots sell for more per square foot.

 

http://www.hcad.org/HearingEvidence/2014/SalesMAPS/p5359.pdf

 

I am questioning WHY a smaller subdivided lot should have a HIGHER assesed tax value per square foot than a house on a larger lot.  How does having two houses on 25 foot lots suddenly make the value for the lot higher when compared with one house on both lots?  Using the example of 1802 Harvard, it is in fact a vacant lot next to a lot with a house on it.  The market value of that land is much higher than assessing it at 50%.  I have personally been involved with over 300 real estate transactions and understand the numbers for creating and capturing value.  When a lot is subdivided, the total value is increased and optimized.  However, all things being equal a 2200 sqft house on a 3300 sqft house should not be appraised the same as a 2200 sqft house on a 6600 sqft house.  THAT IS what HCAD is doing.

[s3mh]

I am qu.  However, all things being equal a 2200 sqft house on a 3300 sqft house should not be appraised the same as a 2200 sqft house on a 6600 sqft house.  THAT IS what HCAD is doing.

 

Example?  1802 Harvard is an anomaly.  A very beautiful old house on a large lot, but a one of a kind property in the Heights. 

 

I picked through some HCAD values for my side of the Heights and the best apples to apples I could find was 817 Ashland (2500 sq ft on 3300 lot, built 2013, HCAD $650k) and 1213 Ashland (2500 sq ft on 6600 lot, built 2002, HCAD $743k).  If 1213 was 2013 construction, it would be valued a good bit higher due to the original sale data which you cannot argue against at a tax protest. 

 

The valuation of smaller lots is a bit too aggressive and the valuation of larger lots is a bit too lax.  But that is why we have protests.  The basic premise that small lots are worth more than big ones is very sound.  And the recent trend has shown that town homes and lot line new construction on small lots will appreciate along with the rest of the market.  Ten and fifteen years ago, anyone buying a town home was basically buying a depreciating asset because there was so much new construction.  But with everything filling in and opportunities for new construction dwindling inside the loop and more neighborhoods getting minimum lot size (like Lindale park), a small lot is really worth more than a full size lot or oversized.

[BBLLC]

I picked through some HCAD values for my side of the Heights and the best apples to apples I could find was 817 Ashland (2500 sq ft on 3300 lot, built 2013, HCAD $650k) and 1213 Ashland (2500 sq ft on 6600 lot, built 2002, HCAD $743k).  If 1213 was 2013 construction, it would be valued a good bit higher due to the original sale data which you cannot argue against at a tax protest. 

 

The valuation of smaller lots is a bit too aggressive and the valuation of larger lots is a bit too lax.  But that is why we have protests.  The basic premise that small lots are worth more than big ones is very sound.  And the recent trend has shown that town homes and lot line new construction on small lots will appreciate along with the rest of the market.  Ten and fifteen years ago, anyone buying a town home was basically buying a depreciating asset because there was so much new construction.  But with everything filling in and opportunities for new construction dwindling inside the loop and more neighborhoods getting minimum lot size (like Lindale park), a small lot is really worth more than a full size lot or oversized.

 

Your statement "The valuation of smaller lots is a bit too aggressive and the valuation of larger lots is a bit too lax."  is what my question is all about.  Protesting land value in the inner city is a losing battle with HCAD.  I have never won in dozens of cases that went past the ARB to a judge.  Their answer is always "that's the way we do it".  I am just looking for the logic behind what appears to be extreme inequity of valuations.  Using your example of the two houses on Ashland.  Their respective appraised value for their land is $247,500 for 3300 sqft and $330,000 for double that.  The market value of the larger lot and house will always be significantly higher than the smaller lot.

 

You said "The basic premise that small lots are worth more than big ones is very sound."  Please, I am not trying to be snarky..  I just cannot see how that should ever be the case,unless there are limitations imposed on the land.  Can you explain it to me?  In my experience in selling my own renovations and construction, houses on larger lots are ALWAYS valued higher.   In my opinion, from a market analysis, if a large lot can be subdivided there is higher market value because you can put more improvements on it than something that has already been subdivided.  But once it is divided, the increased value is NOT in the land it is in the improvement.  The land should not have a multiple of the average $/sqft for tax purposes.

[JJxvi]

All else being equal except SF, a smaller lot will be worth less than a bigger lot, but worth more on a per square foot basis. Market data supports that. Smaller lots sell for higher values per square foot in real life. The evidence is on those sales maps.

[OkieEric]

Galveston County is also apparently getting in on the increases.  After years of stability (admittedly a bit under-appraised) we just got hit with a 48% total increase for this year, all of it in the improvement value of a 129 year old home

 

Still pending in Houston

 

 

[OkieEric]

Has anyone ever successfully protested land $/sq ft when it appears they have adopted the same increase and $/sq ft for an entire area?  In this case land values in one section of Old Braeswood shot up 40% to $70/sq ft, while the land values in the original section (which I think is generally more desirable) stayed at $50/sq ft.  It really defies logic, but I think I know of a single lot sale comp they are using.  Can you realistically expect to wind up with a lower $/sq ft than literally all of your neighbors?  Wasn't expecting this

[mkultra25]

Looks like at least some of the valuations that were still listed as pending are starting to show up. I've been checking our account every couple of days, and just noticed over the weekend that the 2015 valuations had finally been posted for our house. As expected, appraised value hit the 10% increase cap. For market value, the land increased a little over 7%, but the improvement shot up over 70%. Of course I'll be protesting, as I've done every year since buying the house, but it's hard to see HCAD giving much ground on a 10% appraised value increase when they're claiming those kinds of jumps in market value. 

[HoustonMidtown]

Mine finally showed up - went up exactly 10% also....