Real Estate Investing Blog
Welcome!  | Home
Your Premier Source for Turnkey Cash-Flow Investment Property
"Live Where You Want. Invest Where it Makes Sense!" ™
August 6th, 2018 by Marco Santarelli
Milwaukee Real Estate
Milwaukee is often written off as a rust belt city in decline. While it is an urban Midwest town that started to decline in the 1970s, it is seeing a kind of renaissance. Let’s look at the real estate data on Milwaukee before we move on to ten reasons to invest in the Milwaukee real estate market. Milwaukee metropolitan area is home to around 600,000 people. It hit its high of around 750,000 people in the 1960s before the population declined, but it is now a slow growing city. Downtown is undergoing revitalization, and the city is starting to attract college students who moved there following jobs.
Milwaukee Real Estate – Market Trend And Forecast 2018
Real estate market data for Milwaukee suggests that there’s little hope the supply shortage is going to be solved this year. Home building is modestly paced in Milwaukee, Ozaukee, Washington and Waukesha counties, and focused largely on higher-end houses. The limited supply of houses in Milwaukee has pushed up prices, and that should continue in 2018. In the four-county Milwaukee metro area, 21,357 existing homes were sold in 2017, up 1.7% from 2016 and the highest total since 2005.
According to Zillow.com, the median home value in Milwaukee is $113,900. Milwaukee home values have gone up 10.7% over the past year and Zillow predicts they will rise 9.2% within the next year. The median list price per square foot in Milwaukee is $110, which is lower than the Milwaukee Metro average of $142. The median price of homes currently listed in Milwaukee is $134,500 while the median price of homes that sold is $126,400. The median rent price in Milwaukee is $1,095, which is lower than the Milwaukee Metro median of $1,215.
Milwaukee Real Estate Market Forecast 2018
Foreclosures will be a factor impacting home values in the next several years. In Milwaukee 2.8 homes are foreclosed (per 10,000). This is greater than the Milwaukee Metro value of 1.9 and also greater than the national value of 1.6 The percent of delinquent mortgages in Milwaukee is 2.5%, which is higher than the national value of 1.6%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Milwaukee homeowners underwater on their mortgage is 24.2%, which is higher than Milwaukee Metro at 13.4%.
Milwaukee Real Estate Market Trend 2018
According to Trulia, Milwaukee real estate market trends show a 0% year-over-year rise in median sales price and a -4% drop in median rent per month. Milwaukee hosuing market trends show that the average price per square foot for this same period rose to $122, up from $118. Trulia.com has 1,415 resale and new homes in Milwaukee lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Milwaukee, Wisconsin for Apr 26 to Jul 25 was $145,000 based on 1,122 home sales. The median rent per month for apartments in Milwaukee for Jun 25 to Jul 25 was $1,100. Average price per square foot for Milwaukee was $122, an increase of 3% compared to the same period last year.
Milwaukee Real Estate Foreclosure Data 2018
According to Realtytrac, there are currently 1,559 properties in Milwaukee, WI that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,815. In June, the number of properties that received a foreclosure filing in Milwaukee, WI was 24% higher than the previous month and 53% lower than the same time last year. Home sales for May 2018 were down 16% compared with the previous month, and up 178% compared with a year ago. The median sales price of a non-distressed home was $141,900. The median sales price of a foreclosure home was $0, or 0% higher than non-distressed home sales.
10 Reasons To Invest In Milwaukee Real Estate Market
1. Real Estate is Cheap
Milwaukee homes had a median list price of between $150,000 and $155,000. There was a median price per square foot of roughly $110. A large share of the Milwaukee real estate market consists of starter homes and small single family properties perfect for renting out. And you can buy several of these properties with the profits from one condo in a hot California market.
2. Luxury Properties Are a Deal
Luxury markets like the Upper East Side of Milwaukee had a median price of $350,000, a price well below the price tag for mid-market home in hot real estate markets. The hot urban neighborhood of the Historic Third Ward reported a median price of $335,000 in the middle of 2018. Upscale markets like the Lower East Side cost around $250,000. The supply of luxury homes in the Milwaukee housing market is growing, but it isn’t fast enough to meet the full demand.
3. The Potential for Real Deals
Milwaukee is considered a less healthy real estate market than average. For example, Zillow estimates that a quarter of homes have negative equity (worth less than what is owed on them). The national average is about 10%. Around 2.5% of Milwaukee home owners are delinquent on their mortgage. The national average is 1.6%. This means that there are a large number of distressed sellers and potential bargains on the market as well as a steady stream of foreclosures. If you’re in the Milwaukee housing market, this creates the opportunity to find homes incredibly cheap that are not fixer-uppers.
4. A Large Renter’s Market
Milwaukee real estate and rents are both relatively affordable, but what matters most is how much locals can afford. It is their incomes relative to rental rates and property prices that determine whether or not they can buy a home. Wisconsin came in third on a 2017 housing affordability report. Home prices are going up relative to incomes, and that’s forcing many renters to remain renters and newcomers to the area to rent instead of buy.
5. Apartments Are Expensive
While Milwaukee rental rates are below the national average, they’re certainly high. In April, 2018, the median price for a one bedroom apartment cost $830. You’d have to pay several hundred dollars more for an apartment that is comfortable for a growing family … and for that much money, renting a house is a viable alternative to renting a larger apartment. The limited supply of apartments relative to demand means many end up renting houses instead. That will keep the Milwaukee real estate market strong, since there are no signs of a potential apartment or condo glut that would gut rental rates.
6. Constrained Supply Keeps Property Values Strong
Milwaukee’s real estate market is seeing home values go up due to limited supply. The issue is particularly acute for properties costing less than $300,000. This means that many families that want to live in a house will have to rent, because they struggle to find homes to buy. The supply isn’t helped by the modest pace of home construction because most properties being built cost over $300,000.
Another factor is the labor market itself. There is a scarcity of skilled labor to build new homes at the rate they’re needed. Yes, the Milwaukee real estate market is seeing homes built, but as we already said, most of the talent that is available is building luxury homes – not affordable ones.
7. Strong Demographics
Milwaukee, as is true for the rest of Wisconsin, has plentiful jobs and a strong economy. This attracts new residents from across the region while preventing young natives from leaving in search of work. Many Baby Boomers are choosing to remain in their homes, too, preventing those homes from becoming available to the next generation and keeping prices high. This is why first time home buyers are driving up home prices in 2018. The Milwaukee housing market is only going to see demand for homes grow as many Millenials continue to find work in the Trump years and try to start their own families. The area is attracting young adults, too, with 80% of those moving to the area saying it is because they came for a job.
8. A Changing Legal Climate – For The Better
A recent law passed will protect the right of home owners to rent out their homes on AirBnB and other rental sites. And in early 2018, a bill to change the state’s laws on tenants and landlords was passed. It required, among other things, limits on citations and fines for landlords, made renter eviction notices public record for ten years, loosened state renovation standards for historic buildings, and required medical documentation for those who wanted service animals. The bill also limited how long courts could defer an eviction except in cases of proven domestic violence. This makes the Milwaukee real estate market more attractive to landlords.
9. Good ROI Overall
The median rent for Milwaukee hovers around $1100 a month or $13,000 a year. On a $130,000 property, this is a roughly 10% ROI. Rental real estate has an ROI of around 10% per year, half of which you see in appreciation, half of which is in returns. Expect to spend around 40% of the cost of the property to insure and maintain it. That would be $440. Subtract out the mortgage payments if you didn’t pay cash. If someone has a $600 mortgage, that would be a break-even point.
Note that the $1100 rent is an average for everything from two bedroom apartments to five bedroom single family homes. A more realistic rent for a single family home is $1600-$2000 per month. This would with a large down payment on the property to keep the mortgage down yield several hundred dollars a month of profit per property.
10. And the ROI Is Improving
The elimination of Wisconsin’s state property tax will improve the return on investment for property owners. This was the first time the state had no property tax since 1931. Taxes on the median home were nearly $3000 in 2017. If taxes come down, then investors in the Milwaukee real estate market will keep more money without any extra effort.
Important Tips For Beginners Investing In Milawaukee, Wisconsin
If you are a beginner in rental property investing, it very important to read good real estate investing books. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Milwaukee, Wisconsin. Another market to go for diversifying your investments is the Dallas housing market. Dallas, TX is a great market because it has a strong economy and a constant population growth and will make your pockets bigger. As rents goes up smart investors should invest in Dallas.
Similarly, Houston is another great market for investing in real estate for your early retirement. Houston housing market is becoming a hotbed of buyer activity that could be really beneficial for real estate investors; just ask the multitude of overseas investors who are choosing Houston as the city of choice to invest in for the foreseeable future.
Single Family Rental Markets
We also recommend these 8 hottest real estate markets for investors looking to build their portfolio of single family rentals. Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
Legal changes in Milwaukee
property tax repeal
First time home buyers drive up prices
Negative equity and market health
Milwaukee Foreclosure Trends Summary 2018 https://www.realtytrac.com/statsandtrends/wi/milwaukee-county/milwaukee
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified.
Add Your Comment:
(Click to download)
(Click to download)
Follow and Connect
|Call Us Toll Free: (800) 611-3060|