Inside the WRA
Inside the WRA with Bill Malkasian, President
 Every day in the real estate business, you hear about e-transactions, electronic forms, technology, the Internet, and how each of these tools will transform you. Believe it or not, I want to take a break from all the misty promises and take a peek at some recent data about Wisconsin that was recently released by the US Census and published in two major Wisconsin newspapers.
According to the Census, the rich got richer and the poor got less poor during the 1990s. Our median income per household went up 14 percent after inflation. This increase fueled the movement to the affluent bedroom communities throughout Wisconsin. Many of the counties and cities with the highest median incomes in 1989 also posted the highest in 1999. They included suburbs of Milwaukee, Twin Cities, and Madison and in the Fox Valley. All areas have taken on a major suburban character. (Smart Growth anyone?)
Executive pay drove the income numbers in the richest counties of Waukesha, Ozaukee, Washington, St. Croix and Calumet. Communities with the highest average incomes were Chenequa, River Hills, the Waukesha area, the Madison suburbs of Shorewood Hills and Maple Bluff, and the Oconomowoc Lake area near Milwaukee.
Rising income and home values outstripped inflation in all 72 Wisconsin counties during the 1990s, and poverty declined nearly everywhere. Mortgage payments took a bigger bite out of state household budgets.
According to Census data, after accounting for inflation the median household income rose 14 percent to $43,791-meaning that half of all households earned more and half earned less. Interestingly, there was a 58.8 percent income jump in Menomonee County (home of a casino run by the tribe), although its median household income level remained the states lowest at $29,440. The gap between the poorest and richest county (Waukesha) narrowed in the decade but Waukesha citizens earned more than twice as much as Menomonee residents. Milwaukee County posted the state's smallest income growth at 4.8 percent.
Don Nichols, a UW-Madison Economist predicts that as additional numbers are released they will show that the upper 10 percent of the economic tier faired best in the 1990s. He also states that a healthy economy in long-depressed northern counties can be traced to tribe casinos and an increasing number of recently retired people living in resort areas. He also points out that an increasing number of Wisconsin citizens now spend at least 35 percent of their income on home ownership, a level that strains budgets. Obviously the increased demand for houses helped fuel increases in home values. The median home value according to the census rose 3.6 percent after adjusting for inflation to $112,200 statewide.
What are some of my conclusions on this narrow peek into Wisconsin's economy of the last 10 years?
- The current sputtering economy in the last 12-18 months since 1999-2000 may wipe out selected gains in many categories if selected state budget woes are not addressed quickly.
- No mention is made of property taxes in the census data, but common sense ties housing affordability to property taxes, which for part of the 1990s were restrained. Property taxes are going up again an average 7.2 percent and could be a drag on the housing market.
- The issue of affordable housing needs to be revisited in Wisconsin. Though our housing prices are not as high as California, try comparing the wage base of the median income family to the starter home market.
- Pressure from environmentalists on road construction dollars will continue. Good roads build strong residential and commercial real estate markets. Ask anyone about Hwy 29 from Green Bay to Eau Claire or Hwy 53 to Superior. A strong transportation system of roads and airports will build our economy.
- Smart Growth planning till 2010 will "make" the real estate industry for the next ten years. People will continue to move from the central cities with suburban income rising quickly. Voting patterns reflect where people live. It will be interesting to watch the trends of a "no growth" mentality.
REALTORSŪ need to be engaged more in growth discussions.
- Central city living in major metropolitan areas will also increase. The condominium craze has just begun has boomers/early nesters return. Hopefully cities like Milwaukee, Madison and other large metro areas will see the benefits.
- Senior housing will be a new wave in Wisconsin by 2010. Our aging population will demand greater variety in housing to fit their personal and economic needs.
- In southeast Wisconsin the fastest income growth was the town of West Bend, up 61 percent after inflation to $73,333. High paid professionals looking for water and acreage will place pressure on town governments to offer more services. Maybe the McCallum idea of shared services will make more sense in future years.
- Commuters from small towns to cities will increase with more demands for transportation alternatives to the automobile. Wisconsin is in a dilemma-not enough population to subsidize the cost of mass transit. Officials will be forced to choose between school spending and transportation alternatives. I think schools will win.
- Low-income housing will continue to seek a home. Every local official faces an ugly decision as affluent voters shun this form of housing. The bubble will need to burst somewhere or our cities will suffer. Be prepared for some vigorous debate.
Bottom line: The organization in Madison best prepared with a solid set of data about their industry will do well in the next state budget cycle. Dollars are limited and elected officials will seek revenue sources outside sales and income tax to pay for services. WRA needs to be in the research business with access to data about our industry. Count on it in your 2003 budget and dues calculation.
Note: Special thanks to Wisconsin State Journal and Milwaukee Journal/Sentinel for assistance on numbers in this article.
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Chairman's Corner
 Wow, what busy times we are having! The theme at last year's convention was "Let the Good Times Roll," and we really seem to be living up to that ideal. The market has been doing great, the NAR agenda is moving forward well and the WRA has been extremely active and productive.
The quarterly home sales report shows Wisconsin up for the first quarter by 10 percent over last year. That's a great number, higher than the national average. Housing continues to lead the economy and this recovery. We all should take personal pride in that local, state and national success.
The executive committee and nearly 50 Wisconsin RealtorsŪ just returned from the NAR Mid year meetings in Washington D.C. This is the annual meeting we have that offers members the opportunity to meet with our Wisconsin Congressional delegation to convey our real estate interests. Our Wisconsin delegation was, as always, very receptive to the
RealtorsŪ. They know and understand the strength and importance of our industry. Our main issue this year of keeping big banks out of the real estate business has for now been successful. We continue to fight that battle and our legislators are backing us on the issue. Refer to the www.wra.org Web site for updates to the NAR success stories. Some of the trends and topics at the meetings included:
- Virtual Office Web Sites (VOWS) and IDX
- Brownfields Reform and Ginnie Mae Choice
- Predatory Lending and Real Estate
- Moisture and Mold-What You Need to Know to Manage the Risk
- Retirement Solutions for Your Business
- Broker Liability for Distracted Driving-The Age of the Cell Phone
- Homestore Updates
- Updates: Title XI, USPAP
- PDA/Desktop Integration
- Agent/Auctioneer Teams
- Standard of Practice update
- 2003 Officers
I personally want to thank all those who attended the NAR Meetings. They forward our
RealtorŪ issues well by serving on committees and meeting with legislators. More importantly, they represent Wisconsin well by their professionalism and commitment.
As for the WRA specific activities, the staff professionals never seem to slow down. From political involvement, to administration, to new educational opportunities and communication vehicles we are really rolling with success. A special congratulations to VP of Communications Sonja Penner and her staff for receiving an NAR Outstanding Web site Award.
Let's keep those good times rolling.
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