Milwaukee Housing Market Trends for 2023
The housing market in Milwaukee, Wisconsin, has been facing challenges due to a lack of inventory, increasing prices, and limited new construction. According to a recent report released by the Greater Milwaukee Association of REALTORS®, the market has slowed down, but buyers remain active. In this blog post, we will explore the trends and challenges of the Milwaukee housing market in 2023.
Decreased Sales and Increased Prices
Home sales in the metropolitan Milwaukee area were down by 22.6% in February 2023 compared to the same period in 2022. The decrease can be attributed to the previous year's intense competition for homes due to the pandemic, which led to record sales. The increase in interest rates also slowed down demand and made it difficult for some buyers to afford a home.
Despite the decrease in sales, the average price of homes in Milwaukee has increased by 1.9% in February 2023 compared to the same period in the previous year. This increase in prices can be attributed to the exceptionally tight inventory. However, it is noteworthy that February's increase was much slower than January or December, which were 9.5% and 6.6%, respectively.
The Need for New Construction
To moderate the price increases and satisfy the demand for residential dwellings, the Milwaukee housing market needs more single-family and condo units. The market is currently far from becoming a buyer's market, even though new listings fell by 23.12% from February 2022. The lack of new construction of single-family houses and condominiums and over-reliance on apartments to satisfy demand has contributed to the historically tight market.
To reach a balanced market, which is commonly understood to be six months of inventory, the four-county area needed 7,025 additional units in February 2023. That month, there was only enough inventory to satisfy 1.7 months of buyer demand. If we subtract units with an offer on them, that level drops to 0.7 months. This means that thousands of would-be homeowners will be forced to continue renting, foregoing the opportunity to build wealth through home equity and all of the other benefits of homeownership.
The Milwaukee housing market in 2023 faces several challenges due to the lack of inventory, limited new construction, and increasing prices. To satisfy the demand for residential dwellings and moderate price increases, the market needs to develop more single-family and condo units. Buyers and sellers can seek the guidance of REALTORS® to navigate the market successfully. With the right approach, it is possible to achieve the American Dream of homeownership in Milwaukee.
The market's fundamental issue is a lack of new development of single-family homes and condos, as well as an oversupply of apartments. This bottleneck, coupled with the demographic boom of Millennial and Generation Z buyers, historically low loan rates, and a rising economy, has resulted in an unusually tight market.
Home values in Milwaukee County, WI
The following housing market trends are based on single-family, condo, and townhome properties listed for sale in Milwaukee County on Realtor.com. Land, multi-unit, and other property types are excluded. Milwaukee County, WI's housing market has been steadily growing in recent years, with the median listing home price remaining steady at $199.9K from the previous year.
Meanwhile, the median sold price for homes in Milwaukee County, WI was $220K in February 2023. The median listing home price per square foot was $150, indicating that homes are still priced competitively. Homes in Milwaukee County, WI sold for approximately the asking price on average in February 2023. The sale-to-list price ratio of 100% indicates that it is a seller's market, meaning there are more people looking to buy than there are homes available.
On average, homes in Milwaukee County, WI sell after 46 days on the market. The trend for median days on the market in Milwaukee County, WI has gone down since last month, and slightly down since last year. This indicates that homes are selling quickly and that buyers need to act fast if they find a home they love.
There are currently 1,562 homes for sale in Milwaukee County, WI, 191 of which were newly listed within the last week. Additionally, there are 1,165 rentals, with a range of $199 to $26.5K per month. This range of options means that buyers and renters alike can find a home in Milwaukee County
Milwaukee-Area Housing Market Forecast 2023
NeighborhoodScout's data show that during the latest twelve months, Milwaukee's appreciation rate, at 10.60%, has been lower than appreciation rates in most communities in the country. Real estate appreciation rates in Milwaukee have tracked to near the national average over the last ten years, with the annual appreciation rate averaging 5.51% during the period. In the latest quarter, Milwaukee's appreciation rate has been 6.80%.
The Milwaukee housing market has been experiencing steady growth over the past year, with the average home value increasing by 6.1%. This is great news for homeowners and sellers, as it indicates a strong demand for homes in the area. In this section, we will analyze the data provided by Zillow and explore the current housing market trends in Milwaukee-Waukesha-West Allis. We will also provide insights for both buyers and sellers in the current market.
Market Overview & Forecast
The Milwaukee-Waukesha-West Allis housing market is showing steady growth in the median home value, which has increased by 6.1% over the past year, with the typical home value at $284,977 as of February 2023. Although the growth rate is expected to slow down in the next year, Zillow's forecast predicts a stable and consistent growth rate of 0.5%.
Sellers in the Milwaukee-Waukesha-West Allis area can expect to benefit from a seller's market as the median sale-to-list ratio is 0.998, indicating that homes are selling close to their listing price. Furthermore, 37.7% of sales are going over the list price, indicating high demand for homes in the area, which is advantageous for sellers. However, 45.5% of sales are under the list price, so it's important to set a realistic and competitive price to attract buyers.
Buyers should be prepared to act quickly as the median days to pending for Milwaukee-Waukesha-West Allis is around 28 days, indicating a relatively fast-paced housing market. The market is competitive, and buyers should consider working with a real estate agent to help navigate the process and ensure they are making competitive offers.
In conclusion, the Milwaukee-Waukesha-West Allis housing market is showing consistent growth and has a healthy balance between supply and demand. The market is favorable for both buyers and sellers, but it's important to keep in mind that individual neighborhoods and housing types may vary. Buyers should act quickly, and sellers should price their homes competitively to take advantage of the current market conditions. Overall, the outlook for the Milwaukee-Waukesha-West Allis housing market in 2023 is positive.
Here is the Milwaukee-area real estate price appreciation graph by Zillow since the last decade.
Milwaukee Real Estate Investment Overview
Milwaukee's real estate market seems to be doing well, with steady growth in housing prices over the past year. The typical home value in Milwaukee-Waukesha-West Allis is $284,977, which represents an increase of 6.1% over the past year. Moreover, Zillow's one-year market forecast for Milwaukee-Waukesha-West Allis is 0.5%, indicating a stable and consistent growth rate in the housing market. However, it is important to note that the typical home value can vary depending on the neighborhood and housing type.
The Milwaukee real estate market seems to be a good option for affordable housing development, with Bear Real Estate Group receiving $20.6 million in financing for the construction of Michigan Street Commons, a 99-unit fully affordable housing development in Milwaukee.
Milwaukee's foreclosure rate is expected to be lower than ever before, accounting for less than 1% of all mortgages, less than half the average historical rate of 2.5%. However, the GDP growth rate is predicted to be 1.3%, indicating a significant slowdown. It is unclear how this will impact the real estate market in Milwaukee.
Real estate investment is active in Milwaukee, with Kyle Mack, owner of Mackximus LLC, a real estate investment company in Milwaukee, discussing his business in a video interview. Additionally, PIMCO, an investment management firm, manages assets for individual investors around the world.
Milwaukee is investing in its infrastructure, proposing to create the Vel R. Phillips Plaza, situated south of Wisconsin Avenue between North Fifth Street and North Vel R. Phillips Avenue. The city is prepared to move forward on the project which will add to the positive.
There seem to be various ways to invest in the Milwaukee real estate market, such as buying homes to renovate and resell, investing in real estate courses to gain knowledge about the industry, and investing in property management companies that help landlords maximize their investment properties in Milwaukee.
In terms of commercial real estate, Milwaukee's downtown office market has its strengths, highlighted by Fiserv's pending headquarters move from Brookfield to HUB640 by the end of 2023, and Northwestern. However, more Milwaukee office buildings may become apartments in the future.
Overall, Milwaukee's real estate market appears to be doing well, with steady growth in housing prices and various opportunities for investment in the residential and commercial sectors.
Top Reasons to Invest in Milwaukee Real Estate Market
Milwaukee is a city in Wisconsin that offers real estate investors a lot of opportunities. With a population of over 590,000 people, it is the largest city in the state and offers a diverse range of neighborhoods, property types, and investment opportunities. Here are some of the top reasons to consider investing in Milwaukee's real estate market:
- Affordability: Compared to other major metropolitan areas in the United States, Milwaukee offers relatively affordable real estate prices. This means that investors can find deals on both residential and commercial properties that are priced lower than similar properties in other cities.
- Strong rental demand: Milwaukee has a strong rental market, with a high percentage of residents who rent their homes. According to data from the U.S. Census Bureau, over 50% of Milwaukee's residents are renters. This creates a significant demand for rental properties, particularly in areas that are close to downtown, universities, or other major employers. As of March 2023, the average rent for a 1-bedroom apartment in Milwaukee, WI is currently $995. This is an 11% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Milwaukee remained flat. The average rent for a 1-bedroom apartment increased by 1% to $995, and the average rent for a 2-bedroom apartment increased by 9% to $1,085.
- Growing economy: Milwaukee has a diverse economy that is experiencing steady growth. The city is home to a range of industries, including manufacturing, healthcare, finance, and education. According to the Milwaukee Economic Development Corporation, the city has seen a 13.5% increase in employment since 2010, and the unemployment rate has dropped from 9.5% in 2010 to 3.5% in 2022. A growing economy typically translates to increased demand for real estate, both from businesses and from residents.
- Low vacancy rates: With strong demand for rental properties, it's not surprising that Milwaukee has a relatively low vacancy rate. According to data from RentCafe, the overall vacancy rate in Milwaukee was 5.5% in 2021, which is lower than the national average of 6.8%.
- Urban revitalization: Milwaukee's downtown and surrounding neighborhoods have undergone a significant revitalization in recent years, with new development projects and investments in public spaces. The city has also seen an increase in younger residents who are attracted to urban living. This has led to an increase in demand for properties in walkable neighborhoods that offer amenities like restaurants, bars, and shopping.
- Favorable landlord-tenant laws: Wisconsin has landlord-friendly laws that make it easier for property owners to manage their rental properties. For example, landlords can evict tenants for non-payment of rent with just a five-day notice, and there are no limits on the amount that landlords can charge for security deposits. This can make investing in rental properties less risky for investors.
- Availability of financing: Like many other cities, Milwaukee has a range of financing options available for real estate investors. Local banks and credit unions offer commercial real estate loans, and the city has a range of public-private partnerships that provide funding for development projects. Additionally, there are a variety of federal and state programs that offer to finance affordable housing projects and other real estate development initiatives.
Therefore, Milwaukee's real estate market offers several compelling reasons to invest. The city has a strong economy, affordable prices, a growing rental market, and a diverse population. These factors, combined with tax incentives and a robust infrastructure, make Milwaukee an attractive location for real estate investors. However, like any investment, there are risks involved, and investors should carefully consider their options before investing.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
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 constant population growth and will make your pockets bigger. As rents go 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 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.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill-up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
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 through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
- https://www.gmar.com/resources/research-statistics/2021-housing-statistics
- https://www.redfin.com/city/35759/WI/Milwaukee/housing-market
- https://www.zumper.com/rent-research/milwaukee-wi
- https://www.zillow.com/milwaukee-waukesha-west-allis-wi/home-values/
- https://www.realtor.com/realestateandhomes-search/Milwaukee_WI/overview
- https://www.neighborhoodscout.com/wi/milwaukee/real-estate
- https://www.multihousingnews.com/bear-real-estate-lands-21m-for-milwaukee-affordable-project/
- https://www.bizjournals.com/milwaukee/video/6082058683001
- https://www.expertise.com/wi/milwaukee/property-management
- https://www.milwaukeemag.com/milwaukee-mayor-proposes-investing-15-million-to-create-vel-r-philips-plaza/
- https://www.jsonline.com/story/money/real-estate/commercial/2023/03/09/more-milwaukee-office-buildings-will-likely-become-apartments/69963549007/
