Tyler

By GREG JUNEK And ROY MAYNARD
Staff Writers

Booming commercial development and a declining demand for new homes meant gains in Smith County’s tax base this year — though a slightly lesser increase compared to prior years.

Numbers released this week by the Smith County Appraisal District show the total appraised value of new construction for 2008 was $424.61 million, down from last year’s $425.87 million.

Although new structures continue to be built, authorities say new residential sector sales are flat, while commercial buildings are still bringing a healthy price.

“All I can say is, in the commercial area, there’s still a lot going on, a lot of building,” said Taylor Burns, broker/owner of Burns Commercial Properties LLC. “The residential may have slowed down some last year — I don’t know — but I would say that in commercial construction, I don’t think there was a slowdown.”

Burns noted that the dip in appraised value of new property, percentage-wise, is very small.

“It doesn’t sound to me like it’s statistically that significant,” Burns said, adding one cannot draw any conclusions about the health of the local economy from a dip that small.

According to the Appraisal District, retail development in the city of Tyler accounted for a big part of the increase in the tax base. The addition of stores and shopping centers such as Kohl’s, Furniture Row, Cumberland Plaza and the Il Piazza Center added $16.4 million to the tax rolls.

Resorts added, as well, with The Villages timeshares bringing $14.4 million in appraised value to the tax base. And the Willow Wellness Center, Dermatology Associates and Boozer Dental Center totaled $7.6 million in new appraised value.

Jason Wright, 2008 president of the Greater Tyler Association of Realtors, said the commercial market in Tyler continues to amaze him.

“It’s really crazy, which is a good sign; as long as they’re still building commercial, that means we’re still going to need rooftops,” said Wright, adding that about 20 percent of his business is commercial.

But the majority of his business — the residential side — has not seen a great deal of appreciation, certainly not the 5 percent to 7 percent annual appreciation it saw from 2003 to 2007. And this especially applies to new structures, Wright said.

“On all the residential property where you don’t have the valuations as high as what they have in years past, it would definitely be in new construction,” he said. “Builders are not able to build in the profit that they were two and three years ago. That is definite.”

And this applies predominantly to new residential construction.

“That wouldn’t be the case on a resell, but on new construction there has definitely been a hit,” Wright said.

Furthermore, he said he believes a guarded stance from lenders — not the local economy — is a major reason for builders not getting as much per square foot for a new house.

For example, he said he had a customer with “stellar credit” who wanted to buy a $200,000 home. The customer was going to pay a down payment that was half the price of the house, and the loan company was still “making them jump through hoops.”

They almost did not get the loan closed on time, Wright said.

He said this was an example of how lenders are overreacting after the subprime loan defaults.

“Even with the people who can buy those bigger houses, there’s not as many of them out there — not because there’s not as many of them who want to buy them, there’s not as many of them who can buy them because of the mortgage mess that we’re in,” Wright said.

Still, the average home values in Smith County continue to appreciate. The average home’s appraised value in the county rose from $126,719 to $131,899, an increase of 4 percent.

The average appraised home value in the city of Tyler went from $141,921 to $148,172, an increase of 4.4 percent.

But that doesn’t mean new homes aren’t adding significantly to the tax base, the Appraisal District reports. New apartment properties have contributed millions this year. In Chapel Hill, the Cambridge Apartments added $12.1 million to the appraisal rolls, while in Tyler, The Mansions at the Cascades added $16 million. And in Whitehouse, the Stonebrook apartments came in at $10 million in appraised value.