With the release of the DORreport, the Wisconsin Taxpayers’ Alliance summarized these figures last Wednesday. WisTAX notes that total property values throughout the state are up for 2015, but still are about 4.6% below the pre-recession peak value in 2008. The Taxpayers’ Alliance also noted the differences within the state on the property value list.
Value changes were far from uniform across the state. Among the state’s 20 largest cities, only Beloit (5.9%) and Kenosha (5.2%) had growth above 5%. Eau Claire (4.5%), Madison (4.3%), and La Crosse (3.6%) rounded out the top five. Most large cities in the Fox Valley recorded increases in the 2.5% range. The exception was Oshkosh.And if the newly-released home sales report from the Wisconsin Realtors Association is any indication, those values will continue to go up in the near future. The WRA's July report says sales are up by double-digits in the state for 2015, with values also rising, and the Realtors are warning potential home-buyers that markets near bigger cities are
In addition to Oshkosh, values in six other large cities fell. With the exception of Wausau (-0.7%), all were in the industrial southeast. The state’s largest city, Milwaukee, was off slightly (-0.6%), though municipalities in its suburban ring generally grew, save Greenfield (-0.2%).
The state’s 40 most populous counties reflected regional trends found in major cities. Counties in the west and northwest generally outperformed the state, with the Twin Cities’ bedroom counties of Pierce (6.7%) and St. Croix (6.2%) leading the wayEau Claire, Chippewa, and Dunn counties all increased over 4%.
Every region of the state was up in July, with the strongest growth seen in the Northeast region where sales grew 30.3 percent compared to July 2014 as well as the South Central region where sales were up 21.8 percent over that same period. Other strong regions were the West, up 14.6 percent; the North, up 2.5 percent; and the Southeast, up 11.9 percent. Modest growth was also recorded in the Central region, which was up 5.8 percent.A standout in that home sales report is St. Croix County, which is home to many Twin Cities commuters, which not only has been a big contributor to the strong numbers in 2015, but also has had massive increases throughout the last 4 years in the Age of Fitzwalkerstan.
July saw median prices grow 3.8 percent relative to last July. “While median prices have been growing throughout the year, it’s actually good to see the pace settle down a bit,” said WRA President and CEO Michael Theo. For the first half of the year, median prices increased 6.9 percent, which could ultimately erode affordability in the state if this trend continues. "Fortunately the minor changes in prices coupled with slight improvements in mortgage rates and income levels have kept affordability almost unchanged over the year," said Theo. The Wisconsin Housing Affordability Index shows the percent of the median-priced home that a buyer with a 20 percent down payment and median family income can qualify to purchase. The index stood at 218 in July, which is nearly identical to its level during July last year.
Although new listings of homes for sale are up slightly for the year, they dipped somewhat in July, which put some pressure on inventories. "The supply of available housing continues to tighten and has become a more serious problem in the cities," said Theo. Available inventory is down 14 percent to 8.7 months statewide, but counties that are part of metropolitan areas had just 6.5 months of available supply in July, which will continue to put upward pressure on home prices. REALTORS® advise that buyers in such markets will need to consider what the market might look like a year from now. "There are still great opportunities out there, but buyers need to be prepared to move quickly when the opportunity presents itself," said Theo. "Working with an experienced REALTOR® who knows the local neighborhood remains the best way to identify the best values in a tight housing market," he said.
St. Croix County home sales and prices
Year-to-date, Jan-July 2015 vs 2014
Home sales +18.2%
Median Home sales price +12.8% (+$23,100, to $203,000)
2011 vs 2015
Home sales +66.2% year-to-date
Median Home sales price July 2015 vs July 2011 +40.4% (+$61,000)
Somehow, I didn't see a reference to the boom in St. Croix County when Gov Walker unveilied his ridiculous, unfunded health care plan across the river in Minnesota today. It's understandable, as it shows just how well the Twin Cities metro area and Minnesota as a whole has been economically outperforming Wisconsin (with the possible exception of us hippies in Madison).
The kicker in these rising home sales and prices is that there could be some sticker shock when Wisconsinites get their property tax bills this November. Yes, the increase in home sales may spread some of these extra costs and burdens around, if it reflects new houses being built in an area. But when the Legislative Fiscal Bureau made its projections of Wisconsin tax bills last month (with a whopping tax cut of $3 expected over the next 2 years) , they anticipated only a 2.5% increase on the median home value for this year, and 3.2% for next year. Obviously, if values go up more than that, it would seem that total property taxes paid would also be likely to go up (especially if new construction is part of that increase, since total levies are given more room to go up if new construction goes up).
Let’s also note that if sales prices for a home in a certain community keep going up, that makes it likely for assessments for other nearby homes also will go up, which also could lead to a surprise property tax increase for this year and/or next year. So while Gov Walker may be trying to claim that he’s presided over property tax cuts in his time in office, let us not forget that many of those lower taxes were because of lower property values that we are just now recovering from. In addition many of those tax reductions were the result of unfunded gimmicks (like the $406 million giveaway to tech colleges and the increased school levy credit in this budget) that have led to future budget cuts and reductions in services, which are now causing serious damage to Wisconsin’s economy and its economic competitiveness.
So let’s see if Wisconsin’s housing bubble continues to grow in the coming months, and what effect that’ll have both on homeowners, as well as struggling local governments that are seeing increases in needs, but aren’t getting increases in aid from the state. It may lead to a very different reality than the one Scott Walker is trying to sell outside of Wisconsin.