The Milwaukee housing market housing market reflects a complex interplay of rising prices, constrained inventory, and fluctuating sales volumes. Addressing these challenges will require sustained efforts in increasing housing supply through effective policies and incentives for new construction. Balancing supply with demand is crucial to achieving a stable and equitable housing market that benefits both buyers and sellers alike. Here are the latest trends in the Milwaukee housing market.
How is the Milwaukee Housing Market Doing Currently?
Milwaukee Home Sales
Home sales in the Metropolitan Milwaukee area showed resilience through the second quarter of 2024, marking a 5.7% increase compared to the same period in the previous year. However, June saw a 7.0% decline in sales year-over-year, the first dip observed this year. This decrease was particularly notable in homes priced under $300,000, typically appealing to first-time buyers and empty nesters.
Milwaukee Home Prices
The housing market in Metropolitan Milwaukee continued to experience upward pressure on prices, with a 5.9% increase in home prices, averaging $434,100 through the second quarter of 2024. This trend has persisted for 12 consecutive years, highlighting sustained demand and limited inventory.
Milwaukee Housing Supply
The supply of homes on the market showed mixed signals. While listings increased by 8.1% through the second quarter, June recorded a 5.6% decrease in available listings. The inventory levels in June were insufficient, providing only 2.9 months of inventory to satisfy buyer demand, far below the balanced market assumption of 6 months. Adjusting for homes with active offers, the available inventory drops to 1.1 months, indicating a highly competitive seller's market.
Milwaukee Housing Market Trends
The housing market in Metropolitan Milwaukee faces ongoing challenges, primarily stemming from limited new construction and listings. Despite a 44.7% increase in new construction permits for single- and two-family units compared to 2023, the production levels remain insufficient to meet current demand. The long-term implications include a potential shift towards rental markets for many prospective homeowners, limiting their ability to build equity through homeownership.
The persistent imbalance between supply and demand poses risks for future homeownership opportunities and economic stability. Without adequate new construction and inventory, the market may continue favoring sellers, exacerbating affordability issues and limiting wealth-building opportunities through homeownership.
Milwaukee Housing Market Predictions: A Cooling Period on the Horizon?
The Milwaukee housing market has been on a tear in recent years, with home values rising steadily and houses going under contract quickly. But what does the future hold for Milwaukee real estate? Let's dive into the data and see what experts are saying.
- Rising Home Values: The average home value in the Milwaukee-Waukesha-West Allis area is up 7.1% over the past year, reaching $348,439. This indicates strong demand and a seller's market.
- Fast Sales: Homes are flying off the shelves, going pending in around 12 days on average. This is good news for sellers but can make it challenging for buyers to find a home.
- Competitive Bidding: The median sale-to-list ratio sits at 1.006, indicating that homes are often selling for close to or above the asking price. This further highlights the competitive nature of the market.
Forecast:
- Slight Correction Expected: Despite the positive trends, a -1.8% 1-year market forecast for the Milwaukee Metropolitan Statistical Area (MSA) suggests a potential cooling period. This doesn't necessarily translate to a crash, but rather a moderation of the rapid price growth we've seen recently.
So, what does this mean for you?
- Buyers: If you're looking to buy a home in Milwaukee, be prepared for a competitive market. You may need to act quickly and be prepared to offer close to asking price.
- Sellers: The market is still in your favor, but don't expect the same bidding wars that were happening earlier in 2024. It's important to price your home competitively and be prepared to negotiate.
Overall, the Milwaukee housing market is expected to experience a period of stabilization rather than a dramatic decline. This is a healthy correction that will bring more balance to the market.
Here are some additional factors to consider:
- National Economy: A strong national economy could continue to support housing demand in Milwaukee.
- Interest Rates: Rising interest rates could cool buyer enthusiasm and put downward pressure on prices.
- Local Job Market: A healthy job market in Milwaukee will continue to attract homebuyers.
It's important to stay informed about these factors as they can impact the housing market.
Should You Invest in the Milwaukee Real Estate Market?
Milwaukee's real estate market seems to be doing well, with steady growth in husing prices over the past year. The typical home value in Milwaukee-Waukesha-West Allis is $348,439, which represents an increase of 7% over the past year. 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 July 2024, the median rent for all bedroom counts and property types in Milwaukee, WI is $1,195. This is -38% lower than the national average. The monthly rent for an apartment in Milwaukee, WI is $1,125. A 1-bedroom apartment in Milwaukee, WI costs about $1,190 on average, while a 2-bedroom apartment is $1,369. Houses for rent in Milwaukee, WI are more expensive, with an average monthly cost of $1,450.
- 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.
