The housing market in southeastern Wisconsin is still in decline, though the freefall is not as steep as a year ago.
Statistical data from Metro MLS Inc. shows overall residential home sales for the first five months of 2009 in southeastern Wisconsin are down 9.8 percent compared with 2008 and are down 31 percent compared with 2007.
According to Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, the local housing bubble burst with the collapse of the subprime markets in July 2007.
Milwaukee County has provided a bright spot for the region’s housing market during the first half of the year. Home sales in the county were up 12.7 percent in April compared with April 2008, and the county had a 1.9-percent increase in home sales for May when compared with 2008.
The $8,000 tax credit for first-time homebuyers, including in the federal stimulus package, and the lower cost of homes in Milwaukee County have attracted numerous first-time homebuyers
“We have seen an increase in sales of housing in the lower-end price range, under $120,000,” Ruzicka said.
Recently, Realtors have been responding to more inquiries from first-time homebuyers, a sign that the area’s housing market may improve in the second half, he said.
“For the last two years, sellers have been really reluctant to bring down the selling price on their homes. Over the last few months, they have been a little more realistic, and that has brought down prices in the four county areas,” Ruzicka said. “Sellers can now look at their home and figure out how much it is worth and then have it priced competitively. They are more open to making the sale.”
Joe Horning, president of Shorewest Realtors Inc. in Brookfield, agrees that the months of January and February were the slowest. Numbers for the second quarter won’t be available until later in July, but according to Horning, the month of June has been steady and will be ahead of last year’s June.
“The busiest segment of the market is definitely being fueled by first-time homebuyers. We are seeing a lot of sales being put into place that will close in July and August,” Horning said.
According to Horning, the condominium market is lagging behind the single-family home market.
“The Milwaukee downtown condo market is slow,” Ruzicka said. “There has been a lot of construction in that area and it has created an excess supply. A lot of those properties are being taken off the market by converting them into luxury apartments for the next three or four years.”
According to Horning, it has also been slightly more difficult for buyers to secure financing for purchases in the condo market.
However, Chellee Siewart, executive director of the Metropolitan Builder’s Association, said that member companies that deal in the condo market were seeing an increase in business from the baby boomer generation due to space and affordability.
Homebuilders are seeing a slight increase in model purchasing, but have not seen the same increase in permit building that states along the coasts have had recently, Siewart said.
“It started to pick up for us recently,” said David Belman, sales manager for Don Belman Homes Inc., in Waukesha. “One month we will be going really well and then it will be somewhat spotty. We are definitely not getting as much contract work as previous years, but are still seeing a fair amount of interest in demand for properties already constructed.”
Belman expects the June rush the company has experienced to slow down some throughout July, but also expects things to pick up again in the second half of the year.
Horning too is confident that the June pickup Shorewest has seen is an early sign of better things to come in the second half of 2009.
On a national scale, there have also been some positive signs.
According to Alexis McGee, president of Foreclures.com, a leading real estate information provider, the country’s residential real estate market is in a slow but definite recovery mode. The first-time homebuyers tax credit, a decline in prices and low interest rates are all helping to perk up the market, McGee said.
“Affordability is the prime driver. While foreclosures persist and unemployment still worsens, there are positives in the market that give a strong indication that (national) housing markets have bottomed,” McGee said. “Even some interest rate increases have failed to put a damper on prospective home buyers and investors who wisely recognize that buying a home today is more affordable than it has been in decades.”