By Jeremy Rhodes
Unless you’ve been living under a rock for the past few years, you probably know that Waco has recently seen dramatic increases in our home values. These increases began as Magnolia emerged on the scene as a significant cultural attraction and economic force in the mid-2010s, and continued alongside the rising home values that many American cities experienced in the months following the first Covid lockdowns.
While an increase in home values is a great thing for homeowners looking to sell, the resulting increase in property taxes can cause a significant strain on the residents who have no interest in selling their homes. After hearing several of my friends mention their skyrocketing property taxes, I wondered: did all homeowners in Waco see their home values increase astronomically? Or did some see only modest increases?
To explore this question, I downloaded data from the McLennan County Appraisal District that contains the market value for every residential property in the county in 2016 and in 2022. From 2016 to 2022, the average market value for a home in McLennan County went from $131,872 to $249,261, an increase of about 89%, or almost double.
But the value of some homes increased at a rate much higher than 89%. From 2016 to 2022, the lowest-valued homes in the county experienced the most rapid increases in property value. See the table below. Homes in the bottom quintile (valued at $50,000 or less in 2016) saw a 148% increase in their value by 2022, more than doubling to about $124,000. More expensive homes in the county saw a lesser percent increase in home value, such that homes in the top quintile (valued at more than $185,000 in 2016) saw an increase of about 76% from 2016 to 2022. A larger percent increase in home values leads to a larger percent increase in property taxes, a burden felt more acutely by our residents living in less expensive homes.
Next, I got curious about the physical distribution of these increases. Are the increases in home values concentrated in certain parts of the county? Using a geocoding web portal on the U.S. Census Bureau website, I grouped every residence in the county by a level of geography that the Census Bureau calls a block group, and calculated the average value of the homes in each block group. The map below displays this information.
Areas with a darker shade of green show a higher percent increase in home value from 2016 to 2022, and the numbers reflect the percent increase for each block group. Consistent with the table above, we see that the neighborhoods whose residents have lower incomes are also the neighborhoods that saw the most rapid percent increases in property values from 2016 to 2022. Dark shades of green are visible in some of our North Waco neighborhoods like Brook Oaks, Sanger Heights, and Dean Highland, some of our East Waco neighborhoods like Northeast Riverside, and South Waco neighborhoods like Kendrick and Alta Vista. The areas with the lowest home values are the areas that saw the most rapid increases from 2016 to 2022. (Note: I also made an interactive version of this map, so you can click around and see how the property values change throughout the county. Scroll to the bottom of this page to see these maps, or you can see the map of block groups here and a more refined map of census blocks here.)
Whenever I hear Waco residents discussing the challenges facing our community, the topic of affordable housing is always near the top of their concerns. A lot of folks in our city are looking to buy starter-homes in the neighborhoods in which they grew up, but have been priced out. Even the least expensive homes in the county are now 2 ½ times more expensive than they were 6 years ago.
As noted in the 2022-2024 Strategic Plan, the role of Prosper Waco as a data leader is to provide meaningful data relevant to local indicators across sectors. With a growing community focus on affordable housing in Greater Waco, well-aligned with our organizational mission of seeing all Wacoans able to improve their financial security and build wealth, we are pleased to provide this timely and relevant localized data.
As a community, we must continue our efforts to create and maintain a robust supply of naturally-occurring affordable housing for young families who want to create a home in our city and build wealth for their future. Today’s struggling families deserve this just as much as yesterday’s.
Jeremy Rhodes, Ph.D., is director of research & community impact with Prosper Waco.