Thursday, March 27, 2008

Property value growth slows but still healthy in 2007

Property values in southeastern Wisconsin counties grew 6% last year, a relatively healthy rate but the slowest since at least 2004, and for some counties, the past decade. Also, proximity to northern Illinois looks to be a key factor in fueling strong growth.

The slowdown in property value growth is not unexpected given the national downturn in property values and the explosive growth rates of recent years. Of significance, however, is that the region grew slower than the state for the first year since 2002. Overall growth in Wisconsin was 6.2%. From 2005‐2006, the region grew 10.7%; the state grew 9.6%.

The downturn in property values, however, could have impacts on public policy in the region. Property tax caps could become more restrictive as the rate of growth in values and new construction declines. This may challenge municipal and county governments and school districts at a time when budgets are stressed by increased fuel costs and increased demand for social services.

Both Walworth and Kenosha counties — the two counties in the region bordering northern Illinois — had the highest property value growth rates in 2006‐2007 among the seven counties of southeastern Wisconsin. Walworth saw its overall tax base grow 10.5% during that period, while Kenosha was next highest at 7.2%. In residential property value growth, the same scenario was true: Walworth topped the list at 12.6%; Kenosha came in second at 7.7%. During the last decade, Walworth and Kenosha counties have had the greatest overall property value growth in the region.

Milwaukee and Waukesha counties had the slowest overall growth rates in the region, 5.5% and 5.1% respectively. Milwaukee County saw a particularly steep decline in residential property value growth, falling from 11.5% (2005‐2006) to 5.0% (2006‐2007).

Note: The above was taken from the Forum's most recent property values report, the first in a series of two that the Public Policy Forum releases every year. Look for the Forum’s accompanying analysis of property tax rates to be released and posted to the Website later this spring.

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