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Subdivision market shows signs of life

Jerry Deschane is the president and owner of Deschane Communications LLC, a lobbying, consulting and communications firm specializing in the construction industry.

By Jerry Deschane

The long night of recession for subdivision development is showing signs of approaching dawn in Wisconsin.

According to figures released from the state Department of Administration, the total number of new lot approvals in some of Wisconsin’s fastest-growing counties is at its best pace in four years.

The DOA reviews subdivision plat requests for the state’s 24 most-populous counties. Through September, 1,644 new lots in 60 subdivisions were submitted for DOA review this year. That compares to only 1,237 lots in 67 plats submitted for all of 2012.

If plat approvals continue at that pace, 2013 will be Wisconsin’s best year for subdivision plat approvals since 2008.

Specific markets in Wisconsin are doing even better. Dane County has 11 plats so far in 2013 with 709 new or re-platted lots. That is the county’s best performance since 2007 and is beginning to approach average performance levels.

Both Eau Claire and St. Croix counties have more plat approvals in 2013 than they have had since 2006. Waukesha County has had 104 lots in seven plats approved so far this year, the best pace since 2008.

But the news might not be as good as it at first appears. First, the statistics might not represent “new” lots. During the recession, several developers reported that they were re-platting subdivisions in an effort to respond to changes in the market. In other words, the lots might not be new, but rather reconfigured.

The second problem is the reality that, although the market is improving, it is far from normal. The average number of lots reviewed annually by the DOA for the past 19 years has been 11,003, and the pre-crash average was 14,712.

The year-to-date total of 1,644 is an improvement. But at 15 percent of the long-term average, it’s a long way from healthy.

Meanwhile, some Wisconsin builders are reporting market-specific shortages of prime new lots for building. That is consistent with national trends and will continue until lot development catches up to building permit recovery.

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