Property values in Wisconsin rose last year at the fastest rate in more than a decade, marking the sixth straight year values have increased, according to a new Wisconsin Policy Forum report.
From 2018 to 2019, equalized property values grew by more than $31 billion, or 5.72%, the highest growth rate since the 5.81% growth in 2007. All 72 Wisconsin counties experienced growth in equalized value for the first time since before the Great Recession, according to the Department of Revenue.
Residential property values saw the highest increase, growing by 6.1%, compared to a 5.2% increase in commercial property values. The rise in residential property values, which account for 71% of all property values statewide, was the highest since a 10% increase in 2006.
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Of the $31.4 billion total increase in values, $22.6 billion was due to market value increases, compared with just $8.8 billion from new construction. Despite the strong economic growth, the statewide rate of net new construction (1.6%) barely exceeded the 1.55% rate of inflation from January 2018 to January 2019. After hovering between 2.4% and 2.8% from 2000 to 2007, net new construction rates have not exceeded 1.9% over the last 12 years.
With property tax increase limits tied to the rate of net new construction, its slow and uneven growth presents a problem for municipalities. Linking tax increases to a factor that lags inflation in many areas may make it difficult for them to meet budgetary needs over time.
