Madison WI Real Estate Blog

What's a property worth???

that most people thinking of selling are asking, "What is a property worth?" Or more specifically homeowners often ask, "What is MY property worth?" Putting a value on a piece of real estate can be both a science and an art, depending on who you ask. The value of a property (or anything for that matter) is in the eye of the beholder. The price of a piece of property might come from your tax assessor, a recent appraisal, a Realtor market analysis, what the home seller wants for the property, or what the buyer wants to pay for the property.

Every year in Wisconsin, tax bills are sent out to homeowners with their latest property "values" and corresponding property taxes due. An assessment from the city of Madison or Fitchburg (or wherever you live) is one opinion of value. One buyer that I spoke with over the weekend asked me, "why is the list price so much higher than the assessment?" In many cases, the tax assessment tends to lag behind the market value. Over time properties tend to appreciate in value and an accurate assessment (equal to the market value) may only occur every few years. Also, if a property had an addition, or is new construction then the assessment will likely change drastically. Conversely, a fixer upper in rough condition tends to be "worth" less than the assessed value. Another thing to note is that depending on the township, the assessment may be purposely set far below the market value. For example, according to Dane County 2007 tax rates, the Village of Oregon has a 74.82% assessed to market value ratio while McFarland is 86.78%, and the City of Madison is 97.58%. While a property's tax assessment does not give a 100% accurate picture of the true "value", it does help give a ballpark figure to most people.

An appraisal is another opinion of value that home buyers or sellers use to determine what a property is worth. Anytime a property is sold or refinanced with a mortgage lender, an appraisal will often occur. Although, keep in...

What do you know about Fitchburg???

Fitchburg is unique. It seems to be this abyss of land on the south side of Madison that includes 35 square miles. One interesting thing about Fitchburg is that there doesn't seem to be a central downtown. There is no school district specifically for Fitchburg, and yet there's an interesting mix of shopping, apartments, modest homes, and of course very large beautiful homes.

One thing that I like about Fitchburg is that it has nice neighborhoods. The Indians must have had some influence on naming, with names like Seminole Hills, Seminole Forest, Seminole Glen, and Seminole Ridge. Or maybe you would like to live in a place named Quarry Hill, Oak Meadow, Pine Ridge, Jamestown, Byrnewood, or Bellmar. Swan Creek is one of my favorites because it's located a little off the beaten path while still being close enough to everything. This is also an area where there was the Parade of Homes in 2003. In the summertime, Fitchburg can be a great place to hop on your bicycle and ride along the Capitol City Bike Trail. Last summer I had a nice long ride along the Capitol City Trail, through the Arboretum, and around Lake Monona. Aahh, what a great day. I think I'm ready for Spring and Summer.

I have recently been working with a client who looked to Fitchburg for a new condo to purchase. She said, "I really like that area. It seems like there are a lot of young professionals in the area." That makes sense with the mix of technology companies in Fitchburg such as Promega and Berbee. Also nearby are some other major employers include the University of Wisconsin Research Park with over 4000 employees and Epic Systems in Verona with over 2500 employees.

What's your favorite part about Fitchburg?

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Tired of paying high property taxes...

Recently I had an opportunity to become involved with an organization called Civitas. "Civitas is based on the principle that people of good will and ability are more likely to become involved in their communities if they have information and an understanding of how local government operates, where the money comes from, how it is spent and how decisions are made." Growing up in Wisconsin and even today, I am continually told by some people that our property taxes are out of control. I can almost hear some of my parents friends screaming, "These taxes are ridiculously too high and should be lowered."

A recent meeting at a Civitas luncheon told me that property taxes in Wisconsin are higher than most states, but not the highest in the country. Wisconsin currently ranks ninth nationwide in terms of the total property tax burden, according to the latest estimates from the Taxpayers Alliance. On the other hand, Wisconsin also has lower income tax costs and governmental fees.

The core idea that I took away from this recent seminar is that higher property taxes are not necessarily a bad thing. Although someone living on Lake Waubesa that just paid nearly $7000 in property taxes last year for their "fixer upper" might argue otherwise. Let's think about this for a second. If one considers that Government needs money to provide community services such as schools, roads, parks, health and other human services, then the money has to come from somewhere. Where is the best source for raising this money?

The three main areas of taxation are personal income taxes, fees, and property taxes. One of the speakers at the Civitas luncheon mentioned that, "the advantage of obtaining most of the income from property taxes is that it offers a stable, predictable source of revenue." If Wisconsin derived most of its revenue from income taxes, then many governmental budgets could vary dramatically from year to year. Imagine if Kraft (a major employer in the Madison area) had...