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The city of Onalaska is conducting its four-year valuation, and contrary to popular opinion, it looks like real estate values are a little higher than four years ago — but not by much.

According to Les Milde of Milde Appraisal Services, the assessor contracted by Onalaska, the perception is that residential and commercial values are going down.

In a sample taken by Milde of year-over-year resale value of 26 properties sold in the past four years, the average appreciation was almost 2 percent. “Historically, Onalaska attracts a 5 percent annual increase,” Milde told the city’s Finance and Personnel Committee.

That might be good news for some, bad news for others. For home buyers, that’s good news: for home sellers, it’s bad news. The revaluation will set the value as of Jan. 1, 2008 and will stand for most properties for four years.

Historically, assessments have gone up anywhere from 25 percent to 29 percent over the four-year valuation period, with an average of 5 percent increases each year. This time, Milde said it looks like there will be increases more like 15 percent to 19 percent since the last valuation.

Milde said he thinks the perception is that property values are going down when, overall, they are not. “It is a very unusual time for real estate,” Milde said. “There has been a great deal of noise made over real estate values going down instead of up. This has caused increased phone calls and more time required to pore over recent actual sales.”

Alderman Dennis Aspenson echoed this perception. “If we go back four years, it was the top of the (real estate) cycle and everything has gone down since.”

Milde said selling prices might be going down from house to house, but overall, most owners are not selling for less money than they purchased. People forced to move due to employment or other factors might sell for a price that is lower than value. And, certainly, foreclosure prices force prices down for that particular property. However, foreclosures don’t affect an entire community.

According to Milde, that is a perception that those in his business have to fight. “Values are not going down as much as people think and they are actually going up overall,” Milde said. “Everyone is hearing and reading about such things as high foreclosure rates in big markets like California and Florida and think it’s happening all over. There are foreclosures here. In Onalaska ‘a lot’ could mean just one.” He said sales volume is way down but the average selling price is holding.

Holmen Village President, John Chapman agreed. “Our situation is not typical as far as foreclosures going on in larger cities,” he said. “Our building permits are on the same pace, roughly speaking.”

Holmen’s revaluation is scheduled for 2009. Chapman said that due to the growth of the village, property owners might see slightly higher increases in property values.

Three factors will make this year’s assessment difficult: increased foreclosure activity, a lower volume of sales and year-over-year appreciation in the marketplace.

Realtor statistics seem to bear this out. According to the National Association of Realtors, existing home sales volume in the Midwest region declined almost 20 percent in 2008 over last year, and the sales price of existing homes declined almost 3 percent over last year. In addition, the inventory of homes for sale in April 2008 was 8 percent higher than a year ago and 10.5 percent higher in April than in March of this year.

According to the Federal Reserve Bank of Chicago, housing starts in April 2008 increased 8.2 percent and building permits were 4.9 percent higher in April. However, “both of these indicators remain well below their historical averages.”

Local foreclosure activity is a little harder to pin down than national numbers. According to the Mortgage Bankers Association, the national delinquency rate for mortgage loans on single and multiple residential properties in Wisconsin stood at 6.35 percent at the end of the first quarter of 2008. According to the Web site ForeclosureS.com, there have been 5,513 foreclosure filings in Wisconsin from January through April 2008, a 10 percent increase over the same period in 2007.

The La Crosse County sheriff’s office had 130 sheriff’s sales scheduled in 2007. Thirty-two of those were canceled, meaning alternative financing or solutions were found. Already through April 2008, 135 have been scheduled through August 13, 31 of which have been canceled. “We’re seeing more and more (foreclosure filings), but we’re also seeing more cancellations,” said Kathy Scott in the sheriff’s office. “So maybe people are finding alternate funding.”

According to Milde, the law requires the assessor to consider recent fair market sales to set the assessed value. “There have been a lot of distress sales; we’re not seeing fair market value for use as benchmarks,” Milde said.

Complicating the matter for Onalaska, the assessor will complete the valuation before the end of the peak real estate season. Milde could set a valuation that reflects the market as of today. “But if the market spikes down through July, August and September, then the valuation has to hold for four years.

On the other hand, Milde warned Onalaska leaders the valuation could possibly be lower, which might require the city to look at raising the tax rate. “If we’re crazy enough to raise the assessments, we’d better be crazy enough to lower them if the situation calls for it,” he said.

In what promises to be a volatile period for everyone in Onalaska, the assessments of residential and commercial properties started June 9 and will continue through Aug. 15. From Aug. 18-22, an open book period and Board of Review preparation will be conducted, with the formal Board of Review meetings held the week of Aug. 25-29.

While Aspenson acknowledged the assessor had a battle on his hands, he was quick to point out that what the city wanted was an accurate valuation. “With what’s going on with real estate and gas prices … the citizen doesn’t deserve being told that ‘yeah, your taxes are going up’ without strict research. We’re going to have problems and complaints. If you do the research, then I will be comfortable with defending the results.”

Contact Jo Anne Killeen at joanne.killeen@lee.net or (608) 786-6816.