Statistics citing a vibrant apartment market in San Antonio are not being lost on the local assessor. 2019 value proposed notices revealed 18%-25% increases in assessed value across the city. This is on the heels of double-digit assessment increases over the last several years.
A study by Marcus & Millchap showed widespread rental unit demand by new households of younger professionals seeking a renter lifestyle. Additionally, a slowing pipeline of new development has shown rent increases to 5.2% over the last year. Tightening vacancy and rent increases have spurred an increase of market investors. According to the study, out-of-state investor activity was up nearly 20% on a year-to-year basis in terms of volume of sales over the last year.
Despite this optimistic report on better fundamentals, it appears the price point investors are paying may be below the assessor’s original predictions in 2019. In several cases, we were seeing investor prices below the assessor’s proposed values. The appraisal district or board of review did reduce many of these values during hearings, but we have seen an unprecedented level of litigation contesting the 2019 values.
It’s extremely important to review your property financials to determine whether the 2019 value is reflective of the current market fundamentals. Additionally, as we move toward the 2020 tax year, a thorough review by a local professional will help ensure the assessment is in line with the market and not excessive compared to other similar properties.