Report from the Greater Milwaukee Association of Realtors:
January Home Sales Up 7.4%
* 1st Time January Sales Topped 1,000 Units
* Listings Desperately Low
* Inventory Projected to be Tight
February 13, 2018 – Home sales were up 7.4% (72 units) in January in the Metropolitan Milwaukee market over the same period in 2017. January was the 30th month of positive sales since January of 2015, and the strongest January for sales ever in the Milwaukee marketplace.
1,045 homes sold in January compared to 973 in January of 2017. Comparing the numbers to January 2016, sales were up 12% (933).
Historically, January is a low sales month. Sales that close in January were generated by buyers making an offer, and the seller accepting, in November or December. Generally, there are not many buyers searching for homes between Thanksgiving and New Year’s.
However, with the dearth of supply buyers have faced for the last couple of years, and the interest of first-time buyers – making up over 40% of buyers – to own a home, many extended their search into the holiday season.
The 1,636 listings that the market started out the new year with was the fewest listings of any January this century. The 1,636 units listed in January, was 48 fewer than in January 2017.
Since January of 2015, listings have declined in 24 of 37 months.
Sellers typically explore listing their homes for sale in February and March, but there is no indication that we will see an increase in listings this year. A major reason for this is due to a lack of available inventory for those sellers to move into.
The lack of inventory is having a negative, systemic impact on the market. Many would-be sellers (i.e. empty nesters) want to downsize to a smaller housing or condo, but cannot find one, so they remain in their home.
Furthermore, 4 in 10 buyers are first-time buyers and their price point is generally under $350,000. With a lack of housing at or below that point, some buyers stretch themselves to get into a home, but many more are frustratingly forced to rent for another year.
Increasing prices are good and an important indicator of a functioning housing market, but when supply is constricted to the degree we are currently experiencing, it is an indication of a defect in the market. The solution to that defect is creating more units in the $350,000 price range for empty nesters and first-time buyers.
Resolving the defect in the market will be hard to accomplish, however, as land, labor and materials costs make new construction around $350,000 difficult.
Where to go
Buyers should seek the counsel of a REALTOR® in determining their best housing options, and sellers need a REALTORS® expert advice in making correct marketing decisions with their homes.
The Greater Milwaukee Association of REALTORS® is a 4,000-member strong professional organization dedicated to providing information, services and products to “help REALTORS® help their clients” buy and sell real estate. Data for this report was collected by Metro MLS, Inc. a wholly-owned subsidiary of the GMAR.