Protesting property taxes is global. Landowners in India take to streets.

Around the time property tax appraisals are mailed in April, I think every address in Texas gets a flurry of postcards from property tax protest firms.  They all seem to have some combination of “property” “tax” and “protest” in their names. Searching Google for “Texas property tax protest service” nets about 25 million results.  Clearly, Texas property owners are unhappy with their biggest state tax. By comparison, the next highest Texas tax is sales tax, but its protests net only about 773,000 results on Google. If the first few pages of results are any indication, sales tax protests are pretty much a business-level expense, not consumer.

Anyway, after a few years of big increases (remember, I’m up 53 percent in five years) I decided to put all those postcards in a drum and pick one (not really). My initial plan was to out the one I used, but in speaking with others who have performed the same experiment, my results are typical. So why point to one firm when my experience is far more widespread?

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property taxAlthough we’ve warned you a couple of times, just in case you missed it — today is kind of a big deal if you own a home. Today is the deadline (unless you’re in Denton County) to protest your property taxes for this year.

If this has caught you unawares, don’t fret — one local company has come up with PropertyTax.io, a way to determine if you need to protest, compile your evidence if you do, and then download a complete report that you can file electronically with your county’s central appraisal district — in less than an hour in most cases (in fact, it took me about 10 minutes). (more…)

Why Property Taxes are so BAD

Why Property Taxes are so BAD

Several weeks ago I wrote a pair of columns (here and here) about how the core math of Texas property taxes is fundamentally broken (and always has been).  While, A+B=C, if “A” is patently wrong, how can “B” and “C” be accurate?

In this case, “A” is assessed property value, “B” is property tax rate and “C” is the revenue required to run the city and state.  In Texas, without real estate transaction disclosure, “A” is always a bit of a crapshoot as DCAD pulls assessed values out of thin air.  Now I’m sure there’s some enormous algorithm they use to calculate values (a bottle of Jack, a blindfold and a dart board?) but in the end, not having access to the actual selling prices of real estate in Texas hamstrings a meaningful conversation about taxation rates.

As it is, property tax assessment districts in Texas have higher rates (“B”) than are actually needed because they have no visibility into “A” valuations.  Texas rates are high because the underlying assessed values are inaccurate.

Yesterday, the Dallas Morning News outlined how this year’s rate increases hit middle-income homes harder than higher income homes.  Color me shocked!  And yet, the middle class are just as vocal about keeping Texas’ system of non-disclosure in place.

For me, this is the most salient paragraph …

“Local officials say they are hamstrung by state law in trying to accurately assess commercial and high-end residential properties. Texas, unlike most other states, doesn’t require real estate sales prices to be publicly disclosed. Property owners who can afford pricey Realtors often demand nondisclosure agreements. State law also permits property owners who successfully challenge their appraisals to collect attorneys’ fees from the county.”

If non-disclosure died, here’s what would happen…

First, the state would take 3 to 5 years to change the system.  During that time, the state taxation districts would rebuild their databases of assessed values based on transactions occurring during that window.  From there, the state would reverse engineer the taxation rate.  If the state needs $X and property is worth $X, what rate gets us to that level?  Hint … it’s a rate a HELL of lot lower than it is today.

For example …

A $200,000 home taxed at today’s homestead rate of ~2.3 percent equated to $4,600 per year in property taxes.  But let’s say that home is really worth $310,000 … then the tax rate would only need to be 1.5 percent to reach the same $4,600 in annual property taxes.

I hear you saying … “If, after this exercise homeowners still pay about the same, what’s the point?”

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Texas Map Experian v2

It’s finally happened. We know you can’t believe every (any) thing you read on the internet, we can now say the same of credit-reporting agency Experian, whose tag line is “Data Quality.”

I saw an infographic (a nice name for a chart full of data that’s been made “fun”) purporting to show “The Wealthiest ZIP Codes in America” published by credit bureau Experian. To be pedantic, I will point out that “America” consists of two continents and many countries while this chart only talks about the Unites States.

The chart lists the top three ZIP codes in each state. Each state falls into a region. For example, Texas is part of the West South Central region that also contains Louisiana, Oklahoma and Arkansas. It also lists the number of households in each code. Data reportedly came from the IRS and US Census and was filtered through wealth.mongabay.com, freep.com and zipatlas.com.

I spent a few minutes whirling around the chart seeing if I recognized any zip codes from cities I used to live in…and zippo, I couldn’t place any of these toitiest of hoity ZIP codes. So being the scab-picker that I am, I looked a little deeper … (“ruh-roh” as Scooby would say)

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Museum-Tower1

This morning when I was doing my regularly scheduled RSS blog-reading binge, I noticed this post from D Magazine‘s Tim Rogers, asking just where Museum Tower officials came up with the figures in their recent marketing email:

In 2013, growth in Dallas’ high-rise neighborhoods was truly remarkable. According to MLS there was a 36.4 percent increase in the number of units sold, and a 49.6 percent increase in volume.

Increasing demand for luxury high-rise homes generated a 9.7 percent rise in prices during the same time period. Nearly 25 percent of Museum Tower’s square footage has been claimed by residents with an appreciation for the unconventional and uncompromising.

Tim asks in his FrontBurner post, just where the Museum Tower folks came up with that number? According to his calculations using Dallas Central Appraisal District data, only 13 percent of the Dallas Arts District highrise is actually sold.

Well, we know that DCAD data isn’t always the most current information when it comes to real estate. MLS data is updated every nano-second it seems, so that would seem more pertinent. But regardless, we wanted to know where the figures came from, too. That’s why we asked Barbara Buzzell of the Buzzell Company, Museum Tower’s PR rep, where the marketing information came from. As you might expect, the real explanation is a lot less sensational:

“Not every home at Museum Tower is the same size,” Buzzell explained. “As you may know, we have nine different published floor plans. Because of the many variable home sizes sold, we have released the aggregate amount of saleable square footage sold. That number is nearly 25% of the building’s total saleable square footage.”

Seems logical, especially considering how many different floorplans there are. I’m not a math major (understatement of the decade), but this seems kosher to me, especially considering that Buzzell would have access to the most recent sales figures, which won’t post to DCAD for some time.

So the questions we pose to the Realtors out there in the field: are you showing Museum Tower? Are people buying? How long is the lag time between sales and what is recorded in DCAD — Candy has been told six to eight weeks. And finally, are Museum Tower sales unusually slow for a luxury high-rise condo building priced at just under $1,000 per square foot that has been open for sales now for just one month over a year?

(Full Disclosure: Museum Tower is an advertiser on CandysDirt.com)

Stubbs House

You remember our post about the estate sale over at 6243 La Vista. The home, a historic treasure that had been lovingly preserved by Willetta Stellmacher, will hit the market soon, listed by none-other than Elizabeth Mast.

Mast, the foremost Realtor for the Swiss Avenue area, plans to take her time freshening the Landmark Stubbs home and staging it to show off its colorful history and beautiful details. She plans to list the five-bedroom, four-full-and-two-half-bath estate this coming April for $1.5 million. Mast will stage the home using some of Stellmacher’s incredible collection of antiques and showbiz memorabilia.

Elizabeth Mast“We’re already starting with an incredible property,” Mast said via phone this morning. The home on La Vista, which sits just at the northeastern end of Swiss Avenue, has stunning original details, including pocket doors, millwork, and etched glass all over the home. It’s amazing how much of the original details have made it through the home’s past life as a piece-meal boarding house, but many bathrooms sport vintage tile, too.

“It has survived everything,” Mast said of the home, which has a solarium, a carriage house, pool, and porte cochere. It has more than 5,500 square feet of interior space, according to Dallas Central Appraisal District, which values the 1927 landmark at $874,300.

Sure, this would be an amazing home for a history buff, but what Mast wants to emphasize is that this house is perfect for any family. Considering its amazing structure and age, this home could be carefully updated to accommodate any modern family’s lifestyle. And it would do so beautifully.

“This home has such a great deal of warmth to it,” Mast said. “And the more you’re in the home, the more you feel it.”

We can’t wait to see it, both before it hits MLS and during the incredibly popular, not-to-be-missed  May 10-11 Swiss Avenue Mother’s Day Home Tour, of which this incredible property will be the star.

Cold Calling

The first source cited in this report from Bloomberg Businessweek is Dallas Realtor Mary Beth Harrison, who has turned to poring over tax records to find homeowners who might be motivated to sell if they knew how much money they could make.

“That’s how hot things are now,” Harrison said.

I haven’t heard reports of this happening yet, but maybe that’s because no one wants to admit to cold calling for a potential client. So tell me, do you know of a Realtor who is using this strategy, too?

I bet it would be pretty painstaking and monotonous to filter through page after page of appraisal records and compare them against market appraisals. I mean, how on earth would you even go about that considering the immense number of single-family homes in Dallas! Crazy talk!

9806 Inwood Front

As I told you last week, or rather, during Bush Center week, there is another price record setting mansion/estate/manor hitting our market. It even has a name, “Dans Bois Crete,” or translated into English, “In Wood Ridge”. The home is located on that elegant stretch of Inwood Road just south of Walnut Hill, not too far from the estates of Kelcy Warren, Roger Staubach, and Windle and Shirley Turley.

9806 Inwood Dining

When listing agent Christy Berry, who is a dynamo BTW, first told me about this listing, I said, oh yes I know the people who first built that house back in 1996. It was glorious then, a true record-setter of building perfection. They called it Idylwood Hill, which is still the name of the subdivision. My friends built the home with every detail imaginable then settled back and enjoyed it, from the wonderful gourmet chef’s kitchen to the downstairs movie theater with a full-service ticket booth plus candy and popcorn concession stand. At 14,139-square-feet, the very French mansion sits on 5.3-acres tucked inside formidable black iron gates at 9806 Inwood Road.

9806 Inwood Library

In fact, from the road, you cannot see much at all.

Berry will not reveal the owner’s name. According to the Dallas Central Appraisal District, the home is valued at $9.336 million for tax purposes (which means nothing) and is owned by Ceales Trust. According to the Wall Street Journal, who featured the home in Friday’s “Mansion” section (paywall), the owners are Erich and Audrey Spangenberg, founders of patent-assertion legal firm IPNav. According to its website, IPNav has won more than $610 million in patent monetization. Whatever, they apparently own homes all over the world, travel a great deal and Audrey has the most exquisite taste I’ve ever seen: she did most of the extensive re-design herself for more than a year and a half after they bought the home in 2007. Douglas Newby, by the way, was the listing agent then.

9806 Inwood Master

The home has six glorious bedrooms, seven bathrooms and three half baths. Very dramatic: the Spangenbergs applied gold leaf which is on the ceilings of the entry hall and dining rooms. I am talking 24 karat gold leaf. You have never seen anything like it! There is a Baccarat chandelier, and that private theater is paneled in blue velvet. (Wonder if they ever watched the movie, Blue Velvet, in there?) There are Venetian plastered hallways, and in fact I think every wall is Venetian plaster,  coffered ceilings, marble and wood floors and of course security cameras throughout the home. The main part of the mansion includes arched glass French doors, a gaming room with an adjacent bar, a cherry wood-paneled library of imported Honduras Mahogany, a master retreat with attached screened-in porch, the first I had ever seen in Dallas. I do recall those screens were retractable, I believe. There are numerous sitting rooms and studies. The outdoors, designed by renown landscape designer  Harold Leidner,  includes an outdoor kitchen with a full fryer. You could live in this outside oasis. There is also a guest suite and a beautiful home office for the Mistress of the Manor.

9806 Inwood Garden

The Journal says Mr. and Mrs. Spangenberg purchased the property in 2007 for $7.68 million, which I think is incorrect. I think it was more. (Updated 10:08 p.m.) They imported many of the materials from Europe including the front-door handles, which are from Lithuania.

9806 Inwood Salon

I think my personal favorite part of this estate is the wood-paneled entrance to a hidden stairway right off the foyer leading to a 2,200-bottle wine cellar. Downstairs, too is that theater complete with luxury seating, sound proofing and a full concession bar. There is even a fun ticket counter! As the original owner told me, she loves movies and always wanted to have a movie theater in her home! I so agree — though builders tell me they are “out”, I still think a home theater or media room is the ultimate luxury!

9806 Inwood Bar

 

9806 Inwood Theatre

 

9806 Inwood cellar

The mansion has a long, winding drive up with a creek that runs through the lot. Atop the ridge is the home featuring a pool, incredible terrace and sweeping lawns on the vast acreage. There is even a maze garden designed by renown landscape designer  Harold Leidner. The circular drive in front of the home features a cascading Italian fountain flanked by four small fire pits.studded with fire torches.

9806 Inwood Back

Perhaps the most amazing thing about “Dans Bois Crete” is the dramatic westward view from the home come sunset. The torches are ablaze  and the Texas sun is setting, spinning off marvelous glints of orange and yellow as the sun descends. Looking westward over the flickering torches, this home evokes images of a Bavarian castle.

9806 Inwood Westward View