Home sales in the four-county metro Milwaukee area were down 0.8% in November and in the greater seven-county southeastern Wisconsin region were down 5.7%, year-over-year, according to the latest report from the
Greater Milwaukee Association of Realtors.
November home sales by county and % change from a year ago:
- Milwaukee: 787, 1.3%
- Waukesha: 375, -0.8%
- Ozaukee: 83, -4.6%
- Washington: 92, -13.2%
- Kenosha: 108, -15.6%
- Racine: 184, -19.7%
- Walworth: 89, -23.3%
The decline in sales in the Milwaukee area comes after the metro area
posted home sale growth in October, the first year-over-year sales growth for the area in 18 months.
Despite the November sales decline, the number of homes listed for sale in the four-county metro area rose 3.6% and in the seven-county region rose 2.9%, year-over-year.
“Listings are desperately needed in the market and are a major reason unit sales were down,” GMAR said in its report. “Despite a higher interest rate environment, demand is strong and if there were more units for sale, those units would sell.”
The local housing market remains favorable to sellers, with a tight supply of homes available for sale and rising prices, GMAR says. Home sale prices in the Milwaukee area rose 9.7% in November, going from an average price of $346,442 to $379,887.
GMAR continues to say that the Milwaukee area needs more new home construction to meet demand. This year through October there were 1,364 new home construction permits pulled in the four-county metro Milwaukee area, down from 1,688 a year ago, according to GMAR, which says the Milwaukee market needs more than 4,000 new homes built per year to meet demand.
“New construction is in an era of low production beginning way back when the Great Recession started,” GMAR says it its report. “The systemic problem with the market is the lack of new construction of single-family houses and condominiums, and over reliance on apartments to satisfy demand. The imminent danger for the region, if it does not create additional supply in the form of more single-family and condominium units, is that thousands of would-be homeowners will be forced to continue to rent, foregoing the opportunity to build wealth through a home’s equity and all of the other benefits of homeownership.”
Another factor slowing the housing market is the fact that higher interest rates have created a disincentive for homeowners who currently have mortgages at lower interest rates to sell their homes and face the prospect of buying another home with a mortgage at a higher interest rate, GMAR says.
“It does not appear that the market will achieve any kind of balance to benefit buyers in the near future,” the GMAR report states.
