Realtors group expects Foxconn to spur housing construction

Racine, Kenosha, Walworth housing market could benefit

The Greater Milwaukee Association of Realtors expects Foxconn Technology Group’s plan to build a $10 billion manufacturing campus in southeastern Wisconsin will be good news for the local housing market.

Homes sales in Racine, Kenosha and Walworth counties have increased in recent years, but with additional jobs moving into the area, more new homes, condominiums and additional apartment buildings will need to be built, which will grow the market exponentially, said Mike Ruzicka, president of GMAR.

GMAR believes Foxconn will result in more homes being built in Racine, Kenosha and Walworth counties.

“Southeastern Wisconsin will see significant gains in new construction, unit sales, and increased values with the Foxconn development,” Ruzicka said.

There have been 91 building permits pulled for new single family houses in Racine County; 66 in Kenosha County and 46 in Walworth County between January and May, according to the Wisconsin Builders Association.

Additionally, small and large commercial structures, like office buildings, grocery stores and specialty shops will need to be built to accommodate the new workers and their families moving into the area, Ruzicka said.

“The scale of new growth is probably somewhat similar to what the city of Milwaukee experienced after World War II, when the city saw acre, upon acre of new housing and commercial development radiate out from the city center to the south, west and north,” Ruzicka said.

Foxconn is planning a 20 million-square-foot plant, which is expected to be operational by 2020. It will initially employ 3,000 people with the potential to grow to 13,000. Gov. Scott Walker said Wednesday the positions would have an average salary of more than $53,000.

The sale price of existing homes in Racine, Kenosha and Walworth counties has not quite returned the market’s pre-Great Recession peak.

In Racine County, the average annual sales price in 2016 was $167,804, up 6.6 percent from 2015. The average sales price in Kenosha County was $179,598 in 2016, up 6.6 percent from the previous year. In Walworth County, the average annual sales price was $268,177, up 3.2 percent from 2015.

With the Foxconn announcement, home values should rise a little faster in coming years, Ruzicka said.

David Belman, president of Belman Homes and president of the Wisconsin Builders Association, says he agrees the Foxconn announcement will spur interest in housing development, but said before homes can be built, the municipalities will have to be open to creating workforce housing or smaller homes at price points workers can afford.

A 2016 National Association of Home Builders report found that on average, local and state regulatory costs total $84,671 per home built, which has slowed the pace of new home building across the state overall.

That, coupled with the cost of land, makes it difficult to build a house for less than $300,000, Belman said.

With Foxconn jobs paying $53,000 per year, $300,000 homes will not be what many of those employees are looking for, Belman said.

“It is great for our state to have this kind of growth and development and we are going to work to promote this and get homes built in that area,” Belman said. “But it might not just be homes that are getting built, but apartments as well. Regardless, this will be a good thing for Wisconsin for years to come.”

The Greater Milwaukee Association of Realtors expects Foxconn Technology Group’s plan to build a $10 billion manufacturing campus in southeastern Wisconsin will be good news for the local housing market.

Homes sales in Racine, Kenosha and Walworth counties have increased in recent years, but with additional jobs moving into the area, more new homes, condominiums and additional apartment buildings will need to be built, which will grow the market exponentially, said Mike Ruzicka, president of GMAR.

GMAR believes Foxconn will result in more homes being built in Racine, Kenosha and Walworth counties.

“Southeastern Wisconsin will see significant gains in new construction, unit sales, and increased values with the Foxconn development,” Ruzicka said.

There have been 91 building permits pulled for new single family houses in Racine County; 66 in Kenosha County and 46 in Walworth County between January and May, according to the Wisconsin Builders Association.

Additionally, small and large commercial structures, like office buildings, grocery stores and specialty shops will need to be built to accommodate the new workers and their families moving into the area, Ruzicka said.

“The scale of new growth is probably somewhat similar to what the city of Milwaukee experienced after World War II, when the city saw acre, upon acre of new housing and commercial development radiate out from the city center to the south, west and north,” Ruzicka said.

Foxconn is planning a 20 million-square-foot plant, which is expected to be operational by 2020. It will initially employ 3,000 people with the potential to grow to 13,000. Gov. Scott Walker said Wednesday the positions would have an average salary of more than $53,000.

The sale price of existing homes in Racine, Kenosha and Walworth counties has not quite returned the market’s pre-Great Recession peak.

In Racine County, the average annual sales price in 2016 was $167,804, up 6.6 percent from 2015. The average sales price in Kenosha County was $179,598 in 2016, up 6.6 percent from the previous year. In Walworth County, the average annual sales price was $268,177, up 3.2 percent from 2015.

With the Foxconn announcement, home values should rise a little faster in coming years, Ruzicka said.

David Belman, president of Belman Homes and president of the Wisconsin Builders Association, says he agrees the Foxconn announcement will spur interest in housing development, but said before homes can be built, the municipalities will have to be open to creating workforce housing or smaller homes at price points workers can afford.

A 2016 National Association of Home Builders report found that on average, local and state regulatory costs total $84,671 per home built, which has slowed the pace of new home building across the state overall.

That, coupled with the cost of land, makes it difficult to build a house for less than $300,000, Belman said.

With Foxconn jobs paying $53,000 per year, $300,000 homes will not be what many of those employees are looking for, Belman said.

“It is great for our state to have this kind of growth and development and we are going to work to promote this and get homes built in that area,” Belman said. “But it might not just be homes that are getting built, but apartments as well. Regardless, this will be a good thing for Wisconsin for years to come.”

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