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By Tim Brown, Operations Manager, County Information Project |
The accompanying charts show the long-term trends in two
statewide values.1 The red line, which more consistently
trends upwards, shows the monthly average value of each
single family dwelling for which a permit was issued. The blue line,
much more cyclical in nature, shows the number of such permits
issued. As most people are aware, the national housing market
has taken a beating recently, although for the most part Texas has
escaped much of the worst effects. For example, September 2005
and April 2006 respectively were the last months California and
Florida issued more single family dwelling permits than Texas.
As the monthly chart shows, that does not mean there has been no impact. The number of permits issued (blue line), while still showing signs of its cyclical nature, shows a significant and rapid dropoff since 2006. The line actually peaks in March 2006 at 16,637 permits before dropping to a low of 5,661 in December 2007. Curiously, however, the average value of those homes (red line) did not show a sustained decrease until the second half of 2007. And, at $180,100 as of June 2008, the average value is almost back up to its peak of $183,600 which occurred in October 2007.
This continued increase in average value, while the number of permits falls off, is similar to what happened in Texas during the 1980s. In 1983, see the annual chart, the annual number of permits peaked at 103,252 before falling to a low of 36,658 in 1989. Average values continued to climb through this entire period only to drop slightly (< 3 percent) in 1991. The annual average value started back on its upward climb in 1992; a climb which was interrupted with a 1.9 percent drop in 2001 but has otherwise continued unabated through 2007. This trend appears likely to continue through 2008 as the 12-month moving average increased each of the first six months this year.
It is too soon to tell when the housing market will start rebounding. What is clear is that even with the slump in the housing market, permits are being issued as a good clip averaging almost 7,500 a month from February to June. As a result, the addition of new properties will continue to drive increases in total appraised values albeit at a slower pace than in recent years. And county officials and chief appraisers will still be called upon to explain the impact of new properties on total county appraised values.