The North Texas apartment market is red hot and it's pushing property tax assessments up for multifamily properties across-the-board.
It's a trend that's not likely to fizzle out soon. All the major appraisal districts in North Texas will continue to increase apartment assessments for the foreseeable future. Appeals must be routinely filed in order to hold the line on property values and increasing tax bills.
More people are paying more to rent an apartment in the Dallas/Fort Worth Metroplex than ever before. A new apartment costs almost $1,400 a month on average, according to MPF Research. Average monthly rents for properties, new and old, have jumped to $952 a month.
The trend for rising rents has been going on for some time. Average apartment rents in the region are up 5% from a year ago, 25.1% since 2010, and 34.9% since 2005.
Renting Versus Buying
Analysts say young professionals moving to North Texas are choosing to rent high-end apartments rather than buying a home.
Homeownership rates in the United States are at a 20-year low and D/FW has one of the lowest big-city home ownership rates in the nation. At the end of 2014, it stood at just over 56%.
What the Future Holds
The big question about the Dallas/Fort Worth apartment market moving forward is whether complexes, especially older ones, can continue to maintain the current pace of rent growth.
Substantial growth in the Dallas/Fort Worth economy and other demand drivers have so far spurred absorption enough to mute the effects of elevated apartment supply. However, the Metroplex's ability to absorb new apartment product will face more trying tests in the years to come. Elevated construction volumes promise to push supply levels even higher over the next two years.
Mass appraisals can't reflect the individual challenges that each apartment complex faces in the current expanding market. With the trend for increasing property rents and higher property values, owners must do all they can to ensure that their properties are not being over assessed.