The four-county metropolitan Milwaukee housing market continued plowing through the winter in February, posting a 16.4 percent increase in sales over February 2012, the Greater Milwaukee Association of Realtors reported this week.
The market reported 960 sales in February, the most for that month since 2007 (1,033), just before the Great Recession began; and marking the 20th month in a row of increased home sales.
While the continued housing recovery is certainly welcome news, and hopes are that the trajectory of sales depicted in the graph above for 2012 follows into 2013, there is concern over the very low levels of inventory in the market, according to Mike Ruzicka, president of the GMAR.
The market had 7.08 months of inventory in February (calculated by the number of active listings divided by the average monthly sales over the previous 12 months), which is well below the 11.63 months in February 2012. Only 1,952 homes were listed in February 2013, down 18.3 percent from a year earlier.
Realtors are listing homes to be sure, just not at the rate the market indicates it needs to satisfy current demand, Ruzicka said. Confusion and skepticism among potential sellers over what price their home might sell for seems to be the main culprit in their hesitation to list, he said.
Sellers will undoubtedly not fetch prices from the peak of the market, however, prices have stabilized in most communities, he said. And, due to the low levels of inventory the length of time a house is on the market has shrunk significantly.
The law of supply and demand would seem to dictate prices should increase soon, Ruzicka said. With a low supply of homes, stable or increasing demand, historically low interest rates, and positive external factors such as consumer confidence and employment, prices should be pushed upward as buyers outbid one another for a listing.
“It is still a buyers’ market, but just slightly,” Ruzicka said.