Impact of recession, foreclosures still seen in city property values
Milwaukee property values have flattened out after two years of declines, but city officials say the echoes of recession and the shadow of foreclosures continue to stymie economic growth.
From January 2010 to Jan. 1, the total assessed value of all residential property in the city dipped 0.3%, to $17.1 billion, compared with drops of 3.1% in 2009 and 7.2% in 2008. At the same time, commercial property values rose 1.3%, to $9.3 billion, compared with a 1% decrease in 2009 and a 1.6% increase in 2008.
That comes out to a total of $26.4 billion, virtually unchanged from a year ago. Those figures don't include manufacturing properties, which are assessed by the state Department of Revenue.
"I hope we're at the bottom of the valley," said Ald. Michael Murphy, chairman of the Common Council's Finance and Personnel Committee. "Maybe we're getting to the point where we're slowly turning the corner."
City Assessment Commissioner Mary Reavey released the figures as her office mailed out notices to 16,079 property owners whose assessments changed.
That number was down sharply from previous years when the real estate market was more active. Reavey said she mailed out about 70,000 notices in each of the past two years, and nearly twice as many in the years when property values were shooting up by double-digit percentages.
Yet in the wake of the recession, homeowners appear to be more cautious about putting their houses and condominiums on the market, said Reavey and Chief Assessor Peter Weissenfluh. Condos led the residential decline, falling 2.3% to $1.98 billion.
"They still are selling, just a lot slower than they had been," Weissenfluh said. Would-be condo sellers are finding they have to lower their asking prices, keep their units on the market longer or rent out their condos, he and Reavey said.
Overall, the city found just 1,800 arm's-length real estate transactions last year, or 1.3% of the market, Reavey said. That's down from 2,216 sales in 2009 and 3,015 the year before. In a normal year, 4% to 5% of city properties change hands, she said.
By law, those figures exclude foreclosures, Reavey and Weissenfluh said.
Because foreclosures account for most if not all of the housing transactions in the central city, assessors personally inspected thousands of central-city properties, roughly doubling the number of inspections from the usual 18,000 or 20,000 citywide, Reavey said.
Murphy said the foreclosure crisis had led to stagnation in the real estate market. Weissenfluh agreed, but added, "Milwaukee is holding its own on that . . . A lot of areas are hit harder than we are."
The picture was a bit brighter in the commercial real estate sector. All three segments notched modest growth, with major businesses up 0.7% to $4.49 billion; neighborhood businesses up 1.2% to $1.9 billion; and apartment complexes up 2% to $2.92 billion.
Reavey and Weissenfluh attributed the commercial growth to new construction. Mayor Tom Barrett was out of town and unavailable for comment, but his chief of staff, Patrick Curley, called the rise in commercial values an encouraging sign.
Overall, Curley and Murphy called the city's stable property values a welcome contrast to the declines of the previous two years. They expressed hope that property values would eventually start to grow again.
***
• Property owners have until May 16 to file objections to their assessments, regardless of whether those assessments changed. Objection forms can be picked up in Room 507 of City Hall, 200 E. Wells St., or can be requested by phone or through the website.
From January 2010 to Jan. 1, the total assessed value of all residential property in the city dipped 0.3%, to $17.1 billion, compared with drops of 3.1% in 2009 and 7.2% in 2008. At the same time, commercial property values rose 1.3%, to $9.3 billion, compared with a 1% decrease in 2009 and a 1.6% increase in 2008.
That comes out to a total of $26.4 billion, virtually unchanged from a year ago. Those figures don't include manufacturing properties, which are assessed by the state Department of Revenue.
"I hope we're at the bottom of the valley," said Ald. Michael Murphy, chairman of the Common Council's Finance and Personnel Committee. "Maybe we're getting to the point where we're slowly turning the corner."
City Assessment Commissioner Mary Reavey released the figures as her office mailed out notices to 16,079 property owners whose assessments changed.
That number was down sharply from previous years when the real estate market was more active. Reavey said she mailed out about 70,000 notices in each of the past two years, and nearly twice as many in the years when property values were shooting up by double-digit percentages.
Yet in the wake of the recession, homeowners appear to be more cautious about putting their houses and condominiums on the market, said Reavey and Chief Assessor Peter Weissenfluh. Condos led the residential decline, falling 2.3% to $1.98 billion.
"They still are selling, just a lot slower than they had been," Weissenfluh said. Would-be condo sellers are finding they have to lower their asking prices, keep their units on the market longer or rent out their condos, he and Reavey said.
Overall, the city found just 1,800 arm's-length real estate transactions last year, or 1.3% of the market, Reavey said. That's down from 2,216 sales in 2009 and 3,015 the year before. In a normal year, 4% to 5% of city properties change hands, she said.
By law, those figures exclude foreclosures, Reavey and Weissenfluh said.
Because foreclosures account for most if not all of the housing transactions in the central city, assessors personally inspected thousands of central-city properties, roughly doubling the number of inspections from the usual 18,000 or 20,000 citywide, Reavey said.
Murphy said the foreclosure crisis had led to stagnation in the real estate market. Weissenfluh agreed, but added, "Milwaukee is holding its own on that . . . A lot of areas are hit harder than we are."
The picture was a bit brighter in the commercial real estate sector. All three segments notched modest growth, with major businesses up 0.7% to $4.49 billion; neighborhood businesses up 1.2% to $1.9 billion; and apartment complexes up 2% to $2.92 billion.
Reavey and Weissenfluh attributed the commercial growth to new construction. Mayor Tom Barrett was out of town and unavailable for comment, but his chief of staff, Patrick Curley, called the rise in commercial values an encouraging sign.
Overall, Curley and Murphy called the city's stable property values a welcome contrast to the declines of the previous two years. They expressed hope that property values would eventually start to grow again.
***
What's next
• Because Monday is an unpaid furlough day for city employees, new property values will be posted Tuesday on the city's website, www.milwaukee.gov/assessor. Also starting Tuesday, property owners can call appraisers at (414) 286-6565 or email questions through the website.• Property owners have until May 16 to file objections to their assessments, regardless of whether those assessments changed. Objection forms can be picked up in Room 507 of City Hall, 200 E. Wells St., or can be requested by phone or through the website.
