As you ponder your sharply higher home assessment and the higher property taxes it will bring, you might want to look under your feet, because dirt is not dirt cheap any more, News Radio 1200 WOAI reports.
A study done by Jim Gaines, the chief economist of the Texas A&M Real Estate Center, reveals that the cost of land is becoming more and more expensive, and that has a huge role in driving up housing values.
"Not only the direct costs of the land for development, but then the cost of the development process, and then the cost of the regulatory process," he said.
Gaines says the low cost of Texas plentiful land was the main reason why the state had such affordable housing costs in the 1980s and 1990s, and it was that low cost housing that helped drive the states' economic growth.
But he says starting about 2005, a combination of increased land values and new local 'impact fees,' ' costs of property titles,' 'zoning requirements', 'covenants,' 'deed restrictions,' 'easements,' 'right-of-way' 'restrictions,' 'surveying' and 'boundary markers' have helped push that price up. Land now accounts for more than one fifth of the total cost of a Texas home.
Gaines says Texas still has those wide open spaces that made land so inexpensive in the seventies and eighties, but the problem is, land in places where people want to live is becoming more and more scarce.
"The land where it needs to be to satisfy the demand of where people want to live, to be along a major road, to have access to the market center and the employment centers," is rising in price the fastest, Gaines said.
He says the same economic boom over the past thirty years created this modern land rush, and he says the problem is not likely to ease in the coming years, because the state continues to be a desirable place to be, with low taxes and strong economic growth, so he says the problem will not end any time soon.
But, will the higher cost of land end the good times, and make the state less affordable for new businesses and the people the companies want to employ?
Gaines doesn't think so. He says it is true that Texas housing values are skyrocketing, with the average property assessment in Bexar County up 9% this year.
But he says it is all relative.
"You talk to anybody wh just moved here from California or Florida or New York or Connecticut or the Chicago area, and ask them about the relative cost of housing compared to where they came from, and they will tell you, we're still a bargain."