Dallas County residents feel the pinch as property values soar

Connie Ramirez feels regret.

She sold her godparents’ home in Trinity Groves earlier this year, and she wishes she didn’t have to.

“It hurts because my godfather passed but just a couple of days before, he called and said, ‘I’m giving you this,’ and he begged, ‘Please don’t sell.’ It hurts because I went against his word,” she said. “I had to sell it, because of the property taxes. I wasn’t able to afford it.”

The home was valued at less than $80,000 when she inherited it in 2013. Ramirez sold it this year for $174,000. During that time, property taxes increased from around $650 to $7,000, she said.

“They keep going up. There is no light at the end of the tunnel,” Ramirez said.

Many Dallas County property tax bills will likely rise again this year, the increases largely tied to the ongoing steep hike in home prices. The Dallas Central Appraisal District released its annual tax estimates on Tuesday, showing that property market values spiked an average of 24.5% within the last year.

The market value of Dallas County’s residential stock leapt from $179 billion in 2020 to $187 billion in 2021 to $230 billion in 2022.

Commercial properties countywide jumped from $151 billion in 2020 to $157 billion in 2021 to $180 billion this year.

District’s spokesperson Cheryl Jordan said this is one of the largest increases in market values in recent history.

“This is a huge year,” she said.

Nationwide, home prices are surging, and the Dallas-Fort Worth area is a top market. The Dallas Morning News reported this month that the median home sale price of a DFW home was $425,000.

The region’s home prices grew 30.8% year over year in May, according to the latest S&P CoreLogic Case-Shiller Index report. Only Tampa and Miami saw higher price gains than D-FW.

Property taxes are determined by the appraised value of the property. Taxing authorities such as county and city governments and school districts tax a percentage of the property value.

The full impact to property tax bills won’t be fully realized until September, when cities, school districts and other taxing entities have determined new tax rates to comply with recent state law intended to curb property taxes growth.

But experts say most tax bills will still go up.

The increase in market value over last year varied among Dallas County’s 31 cities.

Most cities saw an average market value increase of between 11% and 25%. Both unincorporated Dallas County and the city of Dallas were reported to see an average market value increase of nearly 18%, the appraisal district said.

While smaller, southern county cities saw the largest jump in market value, Ken Smith with the Revitalize South Dallas Coalition said this market hurts South Dallas more.

“We are displacing the low income in South Dallas, and most of the homeowners here are senior and have this fixed income,” Smith said.

Ramirez’s permanent home is a few blocks from the Bishop Arts District. The 63-year-old worries that she will be priced out of her home in a couple of years. She is holding her breath, hoping property taxes don’t surpass her budget.

“But in the next few years, I see it happening,” Ramirez said.

Outside of Dallas, many of the surrounding southern Dallas County cities are seeing market values increase more than 20%.

Glenn Heights city manager David Hall said every city wants to see growth and an increase in home value, but there’s a tipping point.

“From a financial standpoint, it is obviously unintentionally harmful to some folks where the amount of tax that they’re gonna have to pay is gonna go up. In some instances, perhaps forcing them into choices of what to pay. In some instances, perhaps to a point where they can’t afford to make the payment,” Hall said.

His city saw a 34% increase in market value. Census data estimates the median income in Glenn Heights is $72,695.

Hall said the average home price has doubled over the last decade. Glenn Heights holds homes valued everywhere from $100,000 to $600,000, he said, but new development is only building out one side of the scale.

“We’ve seen larger homes generally being built, more expensive homes,” he said.

Cockrell Hill saw a 34 percent increase in market value, the appraisal district’s data said.

City Manager Bret Haney recognizes that Cockrell Hill has some of the more affordable homes in the area, but he has started to see new homes with a starting price of $400,000. The U.S. Census Bureau reported the city’s 2020 median income was $58,137.

The biggest changes in Cockrell Hill have been the disappearance of vacant lots, Haney said.

“We’ve got the key word — gentrification — coming in,” he said.

He said home prices equivalent to Cockrell Hill years ago can only be found outside of the county now. Data from the U.S. Census Bureau shows a net loss of population for Dallas County over the last year, while North Texas as a whole grew.

Haney and Hall said cities are in a tough spot. Limited by a state law that caps annual tax revenue collection to a 3.5% annual growth, the cities won’t benefit from the swell in the market as much as people expect.

“Cities aren’t cashing out. This isn’t a windfall,” Hall said. “We are all sensitive about what is going to happen to our residents.”

Dallas Central Appraisal District also appraises sections of cities split by county lines, so some cities such as Ferris and Wilmer have the largest disparities in the report, Jordan said. The 2022 market value for the 23 commercial parcels in Ferris’ Dallas County property increased by 5%, while Wilmer’s 693 parcels sparked a 69% increase due to a new subdivision, Jordan said.

More construction occurred within the last year than in 2021, with growing, southern Dallas County cities seeing the bulk of new businesses and homes. More than 20 million square feet of space is under construction in southern Dallas, which has become North Texas’ busiest industrial development market.

Wylie had a 28% increase in new construction over last year, followed by Wilmer with a 19% increase and Sachse with a 10% increase.

The ballooned market value has some homeowners taking matters into their own hands. More property owners than ever have contested their home values, upset about the huge increases in property tax bills.

Almost 202,000 property owners filed appraisal protests this year, breaking the record set in 2020 by 24,000 appeals, Jordan said.

“The market is up so much, and we have to raise value, and people are protesting,” she said.

Toby Toler helps property owners protest property tax appraisals. He worries about the market’s impact on property tax bills, saying that huge tax increases in the last few years have hurt family budgets.

“Our clients have been blindsided by recent tax increases,” he said.

Some governments such as Dallas County and the city of Dallas have increased tax exemptions, providing modest relief.

Dallas County added an additional $31,000 tax break to its 2008 tax exemption raising it to $69,000 for senior and disabled homeowners. The county collects about $638 in taxes on an average home value of $350,000. June’s exemption provides an additional $70.66 tax break for these homeowners.

The Dallas City Council approved an 8% increase last month in the amount senior homeowners and those with disabilities can exclude from their property tax valuation to $115,500 from the current $107,000 exemption.

With federal interest rate hikes and discussions of a recession, some real estate experts say there has been a cooling in the D-FW housing market. June sales were down 8% from last year, according to the Texas Real Estate Research Center at Texas A&M University and North Texas Real Estate Information Systems.