Section 1.04 of the Texas Property Code defines market value as follows: 'the price in which a property would transfer for cash or its equivalent under prevailing market conditions if: (A) exposed for sale in the open market with a reasonable time for the seller to find a purchaser: (B) both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and the enforceable restrictions on its use; and (C) both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other".
However, all three of the market conditions noted above can not really be determined without a home truly being on the market for sale, so the tax authorities make their best estimates. In addition, homeowners are allowed to protest and the goal for a homeowner is usually to have their home assessed as low as they possibly can, so that they pay less taxes. If the tax value of a home is higher than the market value (purchase price) of a home, it most likely means the prior owners chose not to exercise their right to protest. It is not an indicator of actual current or future market value.
Market value can only be determined by the market itself. Your best source for determining the market value of your current home, or whether the asking price of a home on the market is reasonable, etc. is to work with a Realtor. Our job is to help you analyze the market, the home in question, and provide education about the purchase or sale you are considering. The web link below offers a free market snapshot of any Houston neighborhood or even specifically around a particular address.