Housing starts in the greater Milwaukee area were up 15 percent in 2016 over the previous year, with more homes built for the first time since 2008.
There were 1,396 single family and duplex building permits pulled last year, compared to 1,212 in 2015, according to Oshkosh-based MTD Marketing Services of Wisconsin Inc., which tracks housing starts.
The last time the number topped 1,300 was in 2007 when there were 1,693 permits pulled. The market peaked in 2004 when 3,007 building permits were pulled.
Average home value in 2016 was $358,414, the highest recorded value since 2000.
Square footage of homes is also on the rise. The average home being built is 2,961 square feet, the largest since 2000.
The numbers are good news for the housing industry. Last year, a record number of homes were sold in metropolitan Milwaukee but low inventory plagued the market.
Throughout the year, inventory (the amount of time it would take to sell all of the homes on the market at a given time) has been under six months, which is considered a balanced market.
Kristine Hillmer, executive director of the Metropolitan Builders Association, said one of the reasons for the increase in home starts is the lack of inventory of existing homes.
“If people want to live in a specific community or school district, then they look at buying something or a major home remodel,” Hillmer said. “Right now is a great time to look at builders because they are locking in to start digging in spring.”
Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said he is encouraged by the number of housing starts, but would like to see it over 2,000.
“It’s a bit like getting over the flu, it feels ok, but then you stand up and still feel a little bit wobbly,” Ruzicka said.
Certain municipalities saw a lot of growth in 2016 including Oconomowoc, Sussex, Menomonee Falls, Hartland and Cedarburg.
In many cases, this is because a subdivision opened, which is very encouraging, Ruzicka said.
The city of Milwaukee was up from 13 new homes in 2015 to 27, but the homes are smaller and lower in price. Average value of the homes being built in Milwaukee is $157,556, down from $211,007 in 2015 and the houses are an average size of 1,818, down from 2,347 the previous year.