NORTH TEXAS (CBSNewsTexas.com) – We’ve talked a lot about property taxes this year. As you likely know, there is now a plan to get relief for Texas homeowners.

We’ve covered the details of the $18 billion package. But it’s a complicated topic, and there have been so many changes. Some of our viewers still had questions.

Jack Fink answers three of those questions below.

What prevents school districts and municipalities from increasing the tax rate to cover the shortfall from the increased exemptions?

– Rich from Fairview

Homeowners have a variety of protections. Back in 2019, the state legislature passed a law preventing municipalities from raising property tax levies on existing properties by more than 3.5% without holding an election.

School districts can’t increase property tax levies on existing properties by more than 2.5% without going to the voters first.

In addition, this year the legislature passed a law that will cap property appraisal increases on non-homestead properties, including commercial properties, to 20%. This is a pilot program for three years. Right now there is no limit on property appraisal increases.

Where do renters stand? Will we be getting our tax rebate?

– Gabrielle

Renters will not be receiving any property tax rebates. Some Democratic state lawmakers proposed a rebate from the state, but that was not part of the deal worked out between Republicans in the House and Senate.

Some lawmakers said they believe renters could save money if landlords passed along some of the savings in property taxes they receive. Speaker Dade Phelan told CBS News Texas that if property taxes are lower, developers may build more apartment complexes, increasing competition, and perhaps lowering rent.

But other lawmakers say there is no proof of this and point out that the state could not require it.

How will tax relief work for people over 65 whose taxes have been frozen for over 10 years? During this time, our property valuation has more than doubled. Will there actually be a tax reduction for us?

– Charles

Homeowners over 65 will benefit in a couple of ways.

First, the state legislature approved a law this year that will increase the homestead exemption. Voters will have to approve this in November because it will require a change to the Texas Constitution. This will lower property tax bills even though school property taxes have been frozen for homeowners over 65, and even with some municipalities already providing their own exemptions on their property taxes.

The second way seniors will get a tax break is through a law passed in 2021. It reduces school maintenance and operations property tax rates by replacing them with taxpayer dollars collected by the state.

How much could you save?

CBS News Texas has created a tool that calculates the estimated difference between what you paid on school property taxes in 2022, and what you would have paid if the approved tax relief package had been approved and in place. Just enter your property value and select the school district you pay taxes to below.

It’s important to note, this is a calculation that only takes into account the homestead exemption and school tax compression. You may apply for other exemptions.

The post What You Wanted to Know About Texas’ Property Tax Relief Plan appeared first on Amora Escapes.

Many think of the Dallas real estate market as the best of both worlds: a big city with endless suburban and rural areas within reasonable driving distance; a growing population and plenty of demand, but ample room to expand; rising prices and plenty of big-ticket buyers, but a pricing base indicative of Texas and the rest of the south that doesn’t get too prohibitive.

While homebuilders appear to be pulling back the scale on plans for new development and consumers are less optimistic than they were at the start of 2022, the Dallas-Fort Worth metro area is seeing ongoing rent and home price growth.

Using information from the U.S. News Housing Market Index, we’ve compiled the data you need to get a grasp on the current state of the market. Here’s what you should know about the Dallas housing market in the recent past, now and looking ahead into mid-2023.

How the Dallas Housing Market Changed in 2022
Looking at permits for new construction of residential housing in the Dallas-Fort Worth area, you may think it’s a tale of two different cities when comparing single-family and multifamily construction, based on data from the U.S. Census Bureau.

The Dallas market had 2,188 single-family home permits approved in December 2022, a 34% decrease compared to December 2021.

Approved permits for single-family homes in the Dallas market reached a five-year peak in March 2022 with nearly 6,000 approvals, and it has largely declined since. In the final three months of 2022, there were 7,088 single-family home permits approved, a 32% decline from the same time period in 2021, which saw 10,570 single-family homes approved for construction.

The majority of single-family construction in the Dallas market is occurring in the suburbs, where there is available land. The outskirts of the metro area is also where more affordable new construction houses are likely to be. If you’re looking for a new house between $300,000 and $600,000, “you’re going to be an hour outside of Dallas,” explains Damon Williamson, managing partner and principal broker at The Agency in Dallas.

There is residential construction activity closer to the center of Dallas, but it’s geared more toward higher-density options. “You’re seeing the multi-unit type development and lots of apartments,” says Belinda Epps, broker and owner of Epps Realty in the Dallas metro area and 2023 president of the MetroTex Association of Realtors.

Multifamily housing construction appears to be picking up steam in the Dallas area as well. Multifamily housing permits had more than 3,102 units approved in December 2022, an 86% year-over-year increase.

The final three months of 2022 saw more than 9,291 units approved for construction, a 71% increase compared to the same time period in 2021, when permits were approved for just under 5,420 units.

Dallas Housing Supply and Demand
While the availability of homes on the market has increased, overall, since spring 2022, December’s supply took another dip. There were 2.3 months of housing supply in December, according to Redfin – on par with the national housing supply, also at 2.3 months, and roughly double what there was in Dallas in December 2021. However, November 2022 had about 3.12 months of housing supply.

The dip in marketed homes for sale may be an indication of a return to ample homebuyer interest, which area real estate professionals are saying appears to be the case, if at a less frenzied pace than in 2021 and early 2022.

“I had a multiple offer situation last week that had 15 offers on it,” Williamson says. He adds that the buyer he was representing ultimately lost out on the deal despite bidding over the asking price – the winning bid was $70,000 over asking, a cash offer and waived all contingencies.

Fortunately, Williamson says that kind of situation appears to be more of an outlier these days, though multiple bids on a home still happen about 20% of the time.

In rental properties, there was a 6.6% vacancy rate in December 2022, down 1.4% year over year, according to the U.S. Census Bureau. The Dallas metro area’s vacancy rate is slightly higher than the national vacancy rate was 5.8% in December.

Looking at mortgage applications, the Mortgage Bankers Association reports its seasonally adjusted Purchase Index decreased 10% as of Feb. 1, 2023, compared with the week prior, indicating a drop in mortgage loan application volume for new mortgages. The unadjusted Purchase Index was 7% above the previous week, and 41% down year over year.

At the same time, consumer sentiment in the Dallas market was 59.7 out of 100 in December 2022, based on the Survey of Consumers from the University of Michigan. That’s a 10.9-point decline compared to one year prior, but much higher than the national consumer sentiment score of just 31.

Median Home Price in Dallas
The median price for a home in the Dallas market in December 2022 was $402,000, a 5.2% increase year over year, according to Redfin data. The median price is down from its historic peak in May 2022, when it reached $463,000, though most parts of the U.S. saw historic peaks around that time as well – higher interest rates have led prices to ease up since then.

Dallas’ median home price is above the national median home price of $388,000, and is also outpacing national price growth. The national median price is up just 1.6% year over year, according to Redfin.

The rental market in Dallas, on the other hand, has seen no downward slope thus far. The median rent in the Dallas-Fort Worth metro area is about $2,000, an 8% increase year over year, according to Zillow data.

Rent in Dallas is roughly on par with the national median rent, which was $1,981 in December 2022.

Impacting home prices in the Dallas market are demand and construction activity, in particular. There are roughly 2.84 million households in the Dallas-Fort Worth metro area, according to the U.S. Census Bureau.

Construction costs in the Dallas area, like the rest of the U.S., are on the rise – 15.4% higher in December 2022 than the same month in 2021, based on the U.S. Census Bureau’s Construction Price Index, which rated the national construction costs at 193.6 in December.

Of course, the biggest impact to buyer affordability is mortgage interest rates – the average interest rate for a 30-year, fixed-rate mortgage in December was 6.36%, according the Freddie Mac. Since then, the average interest rate for a 30-year, fixed-rate mortgage has continued to drop, reaching just 6.09% as of Feb. 2, according to Freddie Mac.

Williamson says the major reason buyers were backing off of home shopping during the latter half of 2022 to interest rates, in combination with high home prices. “The money was talking more than anything else – monthly payments were talking more than anything else,” he says.

Unemployment Trends in Dallas
More than 4.23 million people were employed in nonfarm positions in the Dallas market in December 2022, with an unemployment rate of just 3.3%, according to the U.S. Bureau of Labor Statistics.

While unemployment is low across the U.S. – the national unemployment rate was just 3.7% in December – the Dallas market is faring a bit better.

Construction jobs in the Dallas market are also up, with more than 32,600 in December, according to the Bureau of Labor Statistics, an increase of 2,400 compared with December 2021.

High employment rates in the Dallas-Fort Worth area are helping to keep mortgage delinquencies and foreclosure activity in the area low – foreclosure filings are still below pre-pandemic levels, at just 0.3% as of October 2022, according to Black Knight Inc. data. The foreclosure rate is 0.1% higher than the same time in 2021, but still well below what’s considered normal for the market.

Builder Confidence in Dallas Improves, but Barely
Homebuilder sentiment in the Dallas metro area was rated just 35 out of 100 in December, according to the National Home Builders Association and Wells Fargo Housing Market Index – a decrease of 54 points compared to December 2021, but a very slight increase compared to November 2022, when it hit a low of 33.

Compared to the national homebuilder sentiment, at just 31 in December, Dallas builders seem slightly more confident about buyers’ ability to purchase new homes in the future.

For new houses already constructed, builders are willing to make a deal. Epps says she’s seeing homebuilders dropping the asking price on completed new construction homes $20,000-$30,000 in the Dallas suburbs. “They’re dropping prices to move the inventory,” Epps says.

The amount of demand in Dallas and number of people moving to the area makes it more likely for builders to keep moving on construction than other parts of the country, even if it’s not at the same pace as 2021 or early 2022, Epps explains. “Are they building again? Yes. Are they building a whole lot? No,” she says.

Construction for nonresidential buildings appears to be waning in the Dallas area, based on the Architecture Billings Index from the American Institute of Architects. The index score was 48.6 in December 2022, down 7.8 year over year and continues on a downward trend from the five-year high of 61.2 in January 2022.

Dallas Real Estate Market: Predictions
Low unemployment, year-over-year increases in median home price and anecdotal evidence points to a housing market likely to see similar results as we move forward in 2023, if at more of a balanced pace between buyers and sellers compared to 2021 and early 2022.

However, the decline in consumer sentiment and even lower builder confidence means there may be some drop in demand as well as supply as we look ahead.

The U.S. News Housing Market Index predicts more than 20,600 new permits for single-family home construction will be approved between January and May this year. However, the forecast for housing permits in December 2022, at 3,701, was well above the actual reported number of 2,188.

The forecast of multifamily housing unit permits has been much more conservative, predicting just less than 9,400 units to be approved in the first five months of 2023. Based on the upward incline of multifamily permits at the tail end of 2022, it would be reasonable to expect the actual number of permitted units to be higher than predicted.

Epps expects to see some slowing of price growth and a continued slowdown in construction activity, but the Dallas metro area’s population growth and business activity seems to keep demand for housing strong – she notes that there’s no way to build fast enough to meet the number of people moving to the area. Even if a recession hits the U.S. in 2023, housing market activity will continue, she says.

“We’re still going to be buying, we’re still going to be selling. And we’re still going to be building,” Epps says.

Source: us news

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