Property values across Wisconsin leapt nearly 8.5 percent in 2003, the 12th year in a row of strong increases, according to a report by the Department of Revenue.
The rise, to a total of $391.2 billion, is the third-largest percentage jump since 1992, when property values began soaring.
“I thought we would see some overall dampening,” said Todd Berry, president of the non-partisan Wisconsin Taxpayers Alliance. “It means that housing and [residential] development and the retail development that goes with it is still doing awfully well.”
The surge was the highest in northern Wisconsin, which is rich in vacation homes, and the areas bordering the Twin Cities. Isolated pockets tended to fill the bottom of the list, with Taylor County in north-central Wisconsin ranking last at 2.7 percent.
Residential boost
Residential values led the trend of the overall increase, rising 9.7 percent, to $279.2 billion, as low interest rates continued to attract more people to invest in real estate rather than in a shaky stock market. Commercial values rose 8.2 percent, to $68.3 billion, while manufacturing values crept up 1.6 percent, to $11.4 billion.
Agriculture values fell slightly, to $1.9 billion, as farms were sold off to developers and fields were allowed to go fallow.
The Revenue Department calculates equalized value mainly to determine state aid to schools and municipalities. The increases reflect rising market worth and have no direct link to property tax hikes. Property taxes are based on assessed values and depend on spending levels set by local officials.
But Rep. Frank Lasee (R-Bellevue), who for years has been pushing a plan to limit state and local spending, said higher taxes often follow increases in value nonetheless.
“What happens is it’s easy to raise spending by 7 percent or 8 percent and lower the mil rate by a few pennies and claim you lowered taxes, but in fact you increased taxes,” he said.
In southeastern Wisconsin, Kenosha County had the highest increase in equalized values, at 10.3 percent. Racine County values increased 10.2 percent.
Racine County Executive William McReynolds said the figures showed his county’s efforts to spur new development were paying off.
“It’s encouraging and tells people in Racine County that we’re headed in the right direction and the doom-and-gloom days are over,” he said of the report.
Racine and Kenosha county construction booms are tied to their proximity to Chicago.
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“People are buying big lots and building big houses and that jacks your equalized numbers up,” said Michael J. Serpe, administrative assistant to Kenosha County Executive Allan K. Kehl. “It’s been like that for a while and I don’t see it stopping anytime soon.”
Hot spot
The hot real estate market in far southeastern Wisconsin extends into the southern edge of Milwaukee County, where equalized values rose 15.3 percent in Oak Creek and 11.7 percent in Franklin.
“In Milwaukee County there’s not a lot of land left for expansion,” said Gary Petre, Franklin’s director of administration. “Franklin and Oak Creek are about it.”
Part of Oak Creek’s large increase in equalized values is probably attributable to property reassessments done this year, Community Development Director Doug Seymour said.
Overall, Milwaukee County’s equalized values rose 8.2 percent, putting it in the top half. Suburban Milwaukee counties grew between 8.7 percent and 10.2 percent.
County Executive Scott Walker said he was pleased with the county’s growth, saying Milwaukee County depends to a greater extent than most other counties on redevelopment rather than new construction to expand its tax base.
In the city of Milwaukee, the state numbers echo what residents have seen in recent years — strong increases in property values. From Jan. 1, 2003, to Jan. 1, 2004, the period covered by the state report, the average residential property in the city rose 7 percent in value.
In April, based on the annual revaluation by city officials, residential properties rose an average of nearly 10 percent — a number that will be reflected in next year’s state report. City officials have said the housing market in Milwaukee has been strong in recent years, aided by low interest rates, and they expect it to continue.
Upper limits
Counties in the upper reaches of the state, where sales of cabins are brisk, saw double-digit increases. With shaky stock-market returns in recent years, some people have funneled their investments into second homes.
Sawyer County came in highest with a 12.6 percent increase that put its property values at $2.8 billion.
“We are two-and-a-half hours from Minneapolis-St. Paul and that’s just a nice drive for a vacation home,” Sawyer County Clerk Kris Mayberry said.
The county has ranked high in recent years, a fact that has locals both pleased and worried, Mayberry said.
“It’s a classic double-edged sword,” he said. “It makes us thrive and prosper, but it makes our taxes go up.”
Dane County and the counties near the Twin Cities saw property values climb more than 11 percent.
One of the smallest increases came in Manitowoc County, which is still reeling from the loss of nearly 900 jobs last year when the Mirro Co. aluminum cookware plant closed.
“Pretty ugly, huh?” Manitowoc County Executive David Fischer said when told the county’s equalized values increased just 2.9 percent, to $4.4 billion.
He said he sees positive signs ahead for the area, noting that an economic development corporation is expected to go on line next month to recruit business and help existing employers expand.