I have three things to say about this.
The housing slump that has battered much of the country for two years finally has trickled down to Harris County, where residential property values have declined or stagnated for the first time since the oil bust of the 1980s, the county’s top appraiser said Friday.
Nearly half of homeowners saw their property values decline this year, while a third saw no movement, Harris County Appraisal District chief appraiser Jim Robinson said. Just under 20 percent of properties increased in value, mostly in neighborhoods featuring homes worth more than $500,000.
HCAD has finished appraising 860,000 of the county’s approximately 1 million homes, and homeowners’ value notices should begin arriving in mailboxes in the next few days, Robinson said. The district will spend the next two weeks appraising the remaining homes, mostly new construction and properties damaged by Hurricane Ike.
The total value of the 860,000 homes that have been assessed has declined by about 2.5 percent from last year, Robinson said.
It will be difficult to determine how the sputtering real estate market will affect local governments, which rely heavily on property taxes to fund operations, until all residential and commercial appraisals are completed. Robinson said his office is reporting declining values for many commercial properties after years of soaring appraisals.
“I think there will be some jurisdictions, perhaps a significant number, that will see their tax base less than it was in 2008,” Robinson said.
A decline could force budget cuts or tax rate hikes by some local government entities that have watched their tax revenue grow steadily in recent years.
But local leaders said they have assumed a slowdown was imminent and budgeted accordingly.
1. In a sane world, this would move the biennial crusade for appraisal caps to the back burner. In the world we live in, where there are Republican primaries to be won, I’m not so sure. I must admit, between voter ID and the stimulus, most other agenda items have gotten drowned out to some extent. I haven’t heard much at all about appraisal caps lately. I just think that’s temporary, and not indicative of anything.
2. By the same token, this will probably make it even more difficult to pass sales price disclosure legislation, which is intended to ensure that commercial and high-end residential properties are appraised fairly and accurately. Not that such legislation was likely to pass anyway,
3. This is another reason why federal stimulus money is so important. It can and will help local governments bridge their budget deficits in ways that will let them avoid making the kinds of cuts that would greatly exacerbate the effects of the downturn; specifically, it will help them not have to lay people off. The fewer people that lose their jobs, and the more that feel confident they won’t lose their jobs, the better for the economy.