Average home valuations in the county have skyrocketed for the second year in a row – shooting up a whopping 19.9% to $189,709 this year, El Paso Central Appraisal District certified numbers show.
This year’s increase comes after a 12% jump in home values last year – both fueled by a still-booming housing demand which has driven up sale prices, said David Stone, the CAD’s assistant chief appraiser.
“The market was showing strong increases, and sales have remained strong,” Stone said.
That prompted the CAD to conduct a mass reappraisal this year instead of waiting until 2024. Typically, appraisals are done every three years. The last one was conducted in 2021.
Stone said it’s likely another reappraisal will be conducted next year.
“We’re picking up sales figures all year long. If higher sales prices versus appraised values continue to materialize, we’ll do it again next year,” he said. “The only reason we would not do a reappraisal is if sales prices remained steady or began to drop.”
The median home sales price in El Paso increased nearly 12.9% to $200,000 in 2021 over the previous year, according to data compiled from the Texas Real Estate Research Center at Texas A&M University.
And that trend continues on the upswing, as the median home sales price in El Paso this June was $236,750, the research center’s data shows. That’s up 18.4% over the same month last year.
Protests lower overall taxable value
The county’s total certified property valuation came in at about $54.5 billion this year – an increase of about 8.7% over the 2021 certified figure.
There are nearly 433,700 properties – about 53% of them residential – on the appraisal district’s rolls.
This year, the CAD received about 42,300 property valuation protests, with close to 16,700 of those leading to a reduction in valuation after the hearing process, Stone said. The majority of the protests – about 30,500 – were from residential properties, of which nearly 42.5% led to reduced valuations.
In all, the protests lowered the county’s total property market value by nearly $1.5 billion, Stone said. About $308.6 million of that stemmed from residential property protests.
The impact protests had on the total taxable value of properties this year is more difficult to measure, he said. Texas law limits the increase on the taxable value of properties with homestead exemptions to 10% in a year.
If a property with a homestead exemption increased by 20% in the initial appraisal and that was lowered to 15% after challenge, the taxable value this year would still rise by only 10%. So the property owner wouldn’t see any tax savings as a result of the protest this year, but might in subsequent years — if the property value doesn’t rise again in future appraisals.
Breaking down the valuations
Residential properties in El Paso have historically carried the bulk of the property tax burden – primarily because they make up a larger portion of the tax base.
This year, for example, residential properties comprised 67.1% of the county’s property tax base. That’s up slightly from 65.8% in 2021. In other Texas counties, residential properties account for 40% or less of the total taxable property value.
This year’s CAD’s certified figures show commercial property values in El Paso increased by 7.4%; while industrial properties declined by 0.6%.
Stone said it’s more challenging to assign valuations to commercial properties than residential ones – and more difficult to successfully defend their protests. Commercial property is valued by factors such as how much other properties are selling for and how much it costs to build new ones – neither of which have to be released under Texas’ nondisclosure laws, he said.
“So we don’t have the necessary comparables,” Stone said, adding that many commercial property owners also often have the funds to fight their valuations with experienced legal teams.
People with homestead exemptions will be protected from the full brunt of the valuation increase because of the 10% annual cap.
However, because many properties exceeded that limit for the second time this year, they face a 10% taxable valuation increase for the next few years.
Stone said those who live in apartments will likely bear the brunt of residential valuation increases as property owners often pass on the costs to renters. Apartments and residential properties are not protected by the 10% annual cap on increased taxable value.
Valuations for multifamily housing – comprising primarily apartment complexes which aren’t eligible for homestead exemptions – rose 22.4% over last year.
“Vacancies are close to zero, and that feeds back to supply and demand, which raises rent pricing,” Stone said. He added that having full complexes leads to more expenses and higher income from rents – both of which factor into the property’s valuation.
George Reynoso, who has lived in an East Central apartment complex the past four years, said his rent went up slightly last year.
“We’re waiting for the big one,” said Reynoso, 29, a mechanic who shares the apartment with his girlfriend and their 2-year-old daughter. “We’re just hoping whatever it is comes with enough notice that we can choose whether to stay or find somewhere else to go – maybe even my dad’s house.”
Tax bills looming
With the certified values on hand, local taxing entities are finalizing their budgets and proposed tax rates – which are likely to translate to property tax increases for most El Paso homeowners.
That’s despite those entities looking to adopt tax rates at pennies lower than previous years. The lower rates won’t make up for the valuation increases, leading those entities to collect more tax revenues from property owners – considered a tax increase under state law.
Among those entities is the city, which on Aug. 1 lowered its proposed tax rate from one it had presented to the City Council a month earlier. Even with the new proposed rate of 86.24 cents per $100 valuation – which the city touts as the largest tax rate reduction in more than 35 years – the average homeowner will see an increase of about $83 more on the city’s portion of the tax bill.
For the past decade, the city has been at the forefront of rising property tax bills — comprising half to almost two-thirds of the total tax increase for average value homes based on which school district the property is located, an El Paso Matters analysis shows.
But the city alone doesn’t account for all of the increase – the county, school districts, community college and the hospital district also collect property taxes. The various entities will be adopting their budgets and tax rates in the coming weeks, adding up to the total tax bill property owners will receive in January.
“I’m bracing myself for any increases in rent for me, but I’m glad my dad gets the senior breaks for his house in the Lower Valley,” Reynoso said. “One more thing to add to all our rising bills.”