Home equity on rebound, record sales prices seen

Published on Sunday, 11 May 2014 23:15 - Written by ADAM RUSSELL arussell@tylerpaper.com

A strong local economy, gains in the housing market and new construction translated into modest growth around Smith County.

For the first time since the recession, all 25 taxing jurisdictions avoided at least 1 percent losses in tax values. Only two, Winona ISD and East Texas Municipal Utility District, reported minimal losses, .30 percent and .38 percent, respectively.

Smith County’s preliminary value grew almost 3 percent to $14.5 billion compared to $14.1 billion.

Preliminary taxable values in Tyler grew to $7.2 billion from $7 billion in 2013. The city of Bullard experienced the biggest jump among Smith County cities. Values grew almost 9 percent to $172.6 million from $158.4 million.

Chief Appraiser Mike Barnett said Smith County experienced a strong, steady economy in 2013 and he expects that trend to continue.

Barnett said Texas continues to recover well from the housing market bubble during the recession. Single-family homes in Dallas are staying on the market less than two months on average, clear sign of a bounce back.

Barnett said Tyler properties fared well relative to other markets around the state during the recession and experienced a stellar year.

The Texas A&M University Real Estate Center reported almost $604 million in sales, the highest sales volume since 2007 for the Tyler metropolitan area.

“For most parts of Tyler and Smith County, the home equity lost during the housing crisis has been regained and we are now seeing record sale prices in many areas,” he said.

Barnett is forecasting another positive year for the housing market. He expects up to 5 percent growth around the county though rising interest rates could slow the rise.

He said the state and local economies are benefiting from job growth, higher wages and overall consumer confidence, which are the tailwinds for a rising housing market.

Jim Gaines, research economist for the Texas A&M University Real Estate Center, said the Tyler market’s steadiness is in contrast big jumps in sales volumes and home prices in the “Big Five” markets, Houston, Dallas, Fort Worth, Austin and San Antonio.

Home prices jumped 10 percent statewide and setting record highs around the state, he said.

Statewide sales volumes were the second highest ever, just behind 2006, he said.

Gaines said Tyler’s 10-month average inventory, the time homes stay on the market before sale, is higher than the statewide average of six months.

Average home values increased more than 2 percent to $144,546 from $141,103.

Gaines predicts between 5 percent and 9 percent growth for Tyler and the statewide average to be closer to 9 percent. No jurisdiction experienced home value losses.

New construction around Smith County jumped 29 percent to $254.6 million compared to $180.5 million in 2013. New construction inside Tyler jumped the same percentage to $124.2 million compared to $87.8 million last year.

It’s the first time new construction projects topped $100 million inside the city since 2010.

New construction in Bullard ISD more than doubled to $20 million from $9.2 million. New construction was down for Whitehouse ISD to $26.3 million from $31.3 million a year ago.

The city of Lindale more than doubled its new construction numbers to $16.7 million from $7.3 million while Bullard almost tripled its 2013 numbers to $10 million from $3.5 million.

Mineral values continued to be the lone trouble spot for Smith County. Values were down more than 6 percent to $313.7 million from $334.5 million.

Barnett said the significance of the losses is that wells are showing declining production. Past years’ mineral rights losses were based on market prices for petroleum products.

Lindale, Whitehouse and Troup ISDs all experienced double-digit value losses equaling almost $17 million.

Despite the mineral value losses, Tyler and Smith County appears poised for continued growth with major new construction projects slated for addition to the tax rolls in 2015.

“I think we can expect the trend of steady growth to continue and Tyler’s economy to be strong,” Barnett said.