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New homes are shown being built on Levitan Lane in the Woods Farm area of Madison's Far East Side, where the value of the average home rose 44.4% to $270,800 in new city assessments released Friday. The big increase is due to the class of land shifting from agricultural to residential with improvements on the property. Citywide, the value of the average single-family home rose 5.7% to $300,967.

Stoked by booming businesses in a strong economy, Madison real estate values rose again this year, with the value of the average single-family home increasing for the sixth straight year, jumping 5.7% to a record $300,967.

New assessments, released Friday, showed a solid 6.4% increase in all real estate values, a bit below the 7.4% rise last year. The 5.7% jump for the average single-family home compares to 5.8% in each of the last two years. Early in the decade, average single-family home values dropped in the wake of the Great Recession.

For single-family homes, rising assessments add value to investments but underscore a need for housing that’s affordable to those with lower incomes.

“This is just the next step in the trajectory of what we’ve been seeing,” said Mayor-elect Satya Rhodes-Conway, who takes office Tuesday. “Our economic picture is pretty bright. (But) it’s another warning signal on the affordability question. We do have to take workforce and affordable housing seriously.”

Change in home values

The new assessments are fueled by a 6.3% increase for all residential values, a pinch lower than last year, and a 6.5% rise in commercial values, which is sound but less than the 8.5% last year and half of the whopping 12.9% leap two years ago amid a special focus on hotel revaluations and construction of big apartment buildings.

New construction hit a robust $606.3 million — up slightly from last year but still under the record $750 million two years ago. Of that total, $165 million came from construction of single-family homes and $424 million for commercial properties, which include apartment buildings with more than four units, hotels, stores and offices. Those sums are the second-highest since 2010.

“Madison is an attractive place to live,” city assessor Michelle Drea said. “We’ve got steady, stable growth going up over time. Commercial entities are attracting people to work here, and that’s affecting the residential markets.”

Rhodes-Conway said affordable housing is “an absolute priority” after she is sworn in. A message left with outgoing Mayor Paul Soglin’s office Thursday was not returned.

Basis for taxes

The new values, based on 2018 sales and other data in effect last year, serve as the basis for tax collections.

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The new Springhill Suites at Frey Street and Sawyer Terrace near the Hilldale Shopping Center on the West Side. The value of commercial property in the city increased 6.5% in new assessments released Friday.

The volume of new construction is vital because tight revenue limits restrict how much the city can increase tax collections to net growth, which is the value of new buildings, additions and remodeling minus the value of demolished properties.

The 6.4% rise in real estate values includes $606.3 million in new construction and $1.09 billion in revaluations.

The growth will provide a modest increase under state-mandated levy limits to continue services to city residents at current levels, city finance director David Schmiedicke said, adding that the new construction will allow a roughly 1.3% increase, or about $3.15 million, in tax collections for the next operating budget.

In addition to the 5.7% rise for the average single-family home, the city saw increases in the average value of condominiums of 6.2%, two-unit apartments of 6.3% and three-unit apartments of 3.7%, all a bit lower than last year’s changes.

For single-family homes, the $165 million in new construction was the second-highest since 2010, and the $684 million in revaluations was the highest since 2010.

Although new construction for single-family homes was strong, $14 million in new construction for condominiums was roughly half that seen in each of the last two years and the second-lowest total since 2010. The numbers suggest a temporary lull because the city is seeing a lot of interest in condo construction, Drea said. “In the next year or two, we’ll see quite a boom,” she said.

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For commercial property, apartment buildings between four and 50 units showed single-digit increases and those with more than 50 units rose by 8.7%, far less than the 15.9% last year. All other commercial buildings rose 5.6%, just below the 6.0% last year but far below the 17.3% when hotels and big apartments got the targeted revaluation two years ago.

One still unfolding commercial trend is the evolution of big shopping centers, where large stores are disappearing but being replaced by attractions such as Flix Brewhouse Madison at East Towne Mall and Dave & Buster’s sports bar and Total Wine & More at West Towne Mall, Drea said.

The city also continues to expand and develop through annexations, she said.

Growth in commercial property values, particularly large residential buildings, means that a slightly smaller share of the overall tax levy will be borne by one- and two-family residences, Schmiedicke said.

It’s too early, however, to know what the new values may mean for individual tax bills. That will become clear in late fall when the City Council approves a budget for 2020.

Single-family homes

The changes for average single-family homes in neighborhoods ranged from a 21.7% jump, from $257,200 to $313,000, on the Near East Side off Capitol Square to a 1.5% drop, from $494,100 to $486,900, in the Westview Hills area on the Southwest Side.

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New homes under construction are shown in the Veridian Homes' Village at Autumn Lake development on the Far East Side.

One area, Woods Farm on the Far East Side, had an eye-catching 44.4% jump, but that’s because it’s an area where the class of land is changing from agricultural to residential, and new housing is going up, Drea said.

Overall, 12 areas showed double-digit increases between 10% and 21.7%, seven areas had increases less than 1%, and just one had a decease.

The city essentially has two housing markets: one that’s vibrant for homes under $350,000 that sell quickly, often for more than the asking price, and the other for homes above $350,000 that’s a bit sluggish for Madison but still moving, Drea said.

“The market for homes under $350,000 is extremely hot,” she said.

Again, the city’s priciest homes were in Spring Harbor on Lake Mendota, where the average value rose 3.3% to $1.06 million. Lake shore homes on the Isthmus rose an average 0.6% to $833,300.

The most-affordable homes were in the Burr Oaks-Lincoln School area on the South Side, where average values rose 0.3% to $145,300. Only two other areas — Brams Addition on the South Side and East Broadway on the Southeast Side — had average values under $160,000. Two years ago, five neighborhoods had values under $150,000.

City of Madison home assessments

Overall real estate values in the city of Madison increased 6.4 percent for 2019, and the value of single-family homes rose solidly for the sixth year in a row. The average value of a home in Madison rose 5.7 percent to $300,967.

Area Value % Change
Far West
Spring Harbor-Indian Hills-Mendota Beach Heights-Thorstrand $ 368,000 4.8%
Faircrest-University Highlands 367,500 3.5%
Mohawk Park, Englewood-Old Middleton Rd-Camelot 274,400 9.2%
Highlands-Skyline 717,900 4.3%
Parkwood Hills 398,800 2.5%
Walnut Grove/Sauk Creek 364,200 3.6%
Glen Oak Hills-Crestwood-Merrill Crest 268,000 6.6%
Junction Ridge/Sauk Heights/Willows 399,400 5.1%
Oakbridge 275,200 7.4%
Saukborough-Woodland Hills 404,600 2.3%
Wexford Village-Sawmill-Longmeadow 356,900 6.3%
Blackhawk/Greystone 626,500 5.0%
Cardinal Glen/Birchwood/1000 Oaks 338,100 7.5%
Tamarack 266,303 5.6%
South West
Meadowood 223,400 7.2%
Orchard Ridge 272,400 9.2%
Muir Field West 256,900 3.6%
Highland Village/West Towne Area 238,500 8.4%
Green Tree 269,400 5.1%
Westview Hills 486,900 (1.5%)
High Point Estates 478,300 2.6%
Meadowood West 238,100 7.0%
Heather Downs-Park Ridge Heights 219,300 9.8%
Putnam-McKee 263,000 4.4%
Valley Ridge/Mid Town Commons 308,700 3.8%
Fieldstone 269,400 3.9%
Hawks Landing 592,100 4.1%
Stone Crest Estate/Hawks Creek 350,100 4.5%
Hawks Woods 328,100 5.4%
Nesbitt Valley 291,900 4.0%
Ice Age Falls 338,300 4.4%
Country Grove/Ice Age Ridge 356,000 3.9%
Linden Park/Pine Hill Farms/Sugar Maple/Hawks Crossing 359,400 4.0%
Newbury Heights 305,400 14.3%
Hawks Meadow/Hawks Ridge/Hawks Valley 434,100 2.7%
Near West
Hill Farms 379,600 6.5%
Segoe-Mineral Point Road (Lincoln Hills) 282,800 5.2%
Nakoma 524,700 8.9%
Westmorland 342,000 6.6%
Odana-Midvale Heights-Tokay 322,000 8.0%
Summit Woods 269,900 8.2%
Midvale Heights 312,400 5.6%
Midvale School-Westmorland 341,300 7.1%
Findlay Park-Quarrytown 289,400 4.6%
Midvale Heights-Odana 334,600 7.0%
Sunset Hills 529,600 11.2%
West Beltline-Seminole Highway 190,000 2.4%
Sunset Village-Hilldale 299,800 4.7%
Sunset Village 338,500 5.5%
Sunset Woods-Forest Hills 332,700 7.4%
West Central
Dudgeon-Monroe 375,200 1.1%
Westlawn-Randall School (West High) 484,700 4.1%
Vilas-Longfellow School 324,600 7.3%
University Area 357,700 15.2%
Langdon Area 410,200 13.8%
Near West (Square) 332,000 18.1%
Near East (Square) 313,000 21.7%
University/Breese Terrace 440,300 5.3%
West High-Hoyt Park 432,100 6.7%
University Heights 646,300 2.6%
Brittingham Park 260,800 0.6%
Vilas-Edgewood Avenue 542,200 0.1%
Near South
Waunona 248,400 6.3%
Bay Creek 268,800 4.3%
Burr Oaks-Lincoln School 145,300 0.3%
Bram's Addition 151,800 2.2%
Far South
Arbor Hills-South Beltline 314,100 3.9%
Rimrock Heights-Moorland Road 218,800 5.2%
East Central
Lapham School-Breese Stevens (Square) 274,600 5.3%
Wil-Mar/Orton Park 373,800 1.0%
Tenney Park 362,700 4.0%
East High 228,200 10.2%
Atwood-Winnebago 258,800 9.3%
Fair Oaks-Worthington Park 179,700 10.9%
Northgate-Aberg Avenue 178,900 9.5%
Elmside-Oakridge 393,000 6.3%
Eastland-North Gardens 188,800 5.2%
Near East
Highwood-Glendale 220,800 7.1%
Glendale 213,800 6.4%
Lake Edge 194,600 0.5%
Olbrich 186,800 9.2%
Eastmorland 210,000 9.5%
Olbrich Park-Cottage Grove Road 211,200 13.8%
Far East
East Broadway 152,100 8.0%
Elvehjem-Acewood 209,400 8.8%
Elvehjem-Buckeye-Droster 234,600 6.5%
Rolling Meadows 220,200 9.2%
Rustic Ridge-East Ridge 240,600 3.1%
Milwaukee Street I90-94 221,000 7.0%
Heritage Heights 248,000 8.3%
Richmond Hill 359,400 3.8%
Mira Loma 235,200 11.3%
Grandview Commons 293,100 8.5%
Twin Oaks-Liberty Pl-Owl Crk 254,400 7.0%
Door Creek/Reston Heights 282,500 6.1%
Eastlawn/Covered Bridge/Rustic Acres 299,500 8.7%
Southeast Blooming Grove Attachment 188,500 1.7%
Lost Creek 258,000 2.7%
Siggel Grove & Quinn Ranch 278,100 2.1%
Secret Places @ Siggelkow Preserve 330,600 6.0%
North East
East Washington Avenue-Stoughton Rd- Commercial Avenue 178,200 6.6%
Whitetail Ridge 226,600 2.2%
Holiday Bluff 226,200 4.2%
Berkeley 177,000 9.3%
Prentice Prairie-Ridgewood 251,200 3.2%
Village at Autumn Lake 306,900 14.5%
Parkway Village 246,100 2.3%
Woods Farm 270,800 44.4%
Near North
Patio Gardens-Lakeview Heights 211,500 7.3%
Northport-Sherman Village 198,300 9.6%
Cherokee 333,100 0.3%
Lerdahl Park 252,300 5.4%
North Lake Mendota 279,000 5.1%
Sherman School 185,000 7.3%
Brentwood Village-Sheridan Triangle 220,900 7.9%
Nobel Park-Mendota Hills 198,300 8.2%
Lake Shore
Waunona 671,300 0.6%
Woodward 873,900 4.0%
Spring Harbor 1,062,700 3.3%
Isthmus 833,300 0.6%

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