Statewide home values increase by just 1%

By Steven Walters
Milwaukee Journal Sentinel

Reflecting the national economic slump and flooded real estate market, the state Revenue Department said today that values of existing Wisconsin homes increased by just 1 percent last year — the smallest increase in 21 years.

And, the agency reported in its annual report on property values, the value of all property statewide went up in 2007 by only 3 percent — about one-third the average increase in each of the past five years. By law, the Revenue Department must update property values as of Jan. 1 to reflect sales over the past calendar year.

The values of existing Wisconsin homes had gone up by an average of 5 percent in each of the last five years. That growth pumped up the tax rolls of schools, cities, towns, villages and counties, helping them pay for municipal services through property taxes levied on those higher values.

The 1-percent increase in home values statewide last year will make the 2009 budgets of local governments even harder to prepare.

But state Revenue Secretary Roger Ervin said Wisconsin homeowners should be glad that the values of their single biggest asset didn’t go down, as it has in other regions of the nation. The Office of Federal Housing Oversight has predicted that average home values across the United States will drop slightly, Ervin said.

Wisconsin’s 1-percent increase in the value of existing homes, and a 2-percent increase in new home construction statewide, was a signal of a “relatively stable” real estate market, he said in a statement.

Home values in many other states — including California, Arizona and Florida, which have some of the highest foreclosure rates — have seen “extreme” drops in their values, Ervin said.

The overall 3-percent growth in the value of all Wisconsin land and buildings made the value of that property an estimated $514 billion on Jan. 1. Homes made up 72.3 percent of that $514 billion; commercial property, 17.7 percent; manufacturing, 2.4 percent; and farmland, forest and other types of property made up the rest.

Home values in Milwaukee and five of the state’s other larger cities either did not go up or fell slightly last year, according to the report.

The value of homes in Milwaukee did not change in 2007. The value of those homes had gone up by 4 percent in 2006.

The report also said average values of existing homes also did not change in Waukesha, Green Bay and La Crosse in 2007. Waukesha home values had gone up 4 percent in 2006; it was the second straight year of flat values for Green Bay homes.

Values of existing homes fell by 1 percent in Kenosha and Superior last year, according to the new report. Kenosha home values had increased by 4 percent in 2006.

In three other large Wisconsin cities — Madison, Racine and Wausau — average values of existing homes went up by 1 percent last year, the Revenue Department said. That was the same growth in Madison as in 2006; Kenosha homes had gone up an average of 3 percent in ’06.

Lafayette County in southwest Wisconsin led the state in 2007 with a 14.2-percent increase in property values, the Revenue Department reported. Other counties with the biggest one-year growth were: Juneau, 8.8 percent; Clark, 8.5 percent; Waushara, 8.3 percent; Menominee, Marquette and Green Lake counties, 7.7 percent each; Jackson and Portage counties, 7.1 percent each, and Rusk County, 7 percent.

One of Wisconsin’s 72 counties — Barron County in northwest Wisconsin — lost value in 2007, but the drop was less than 1 percent.