Home sales in the four-county metro Milwaukee area fell 29% in October, year-over-year, and 26.3% in the greater southeastern Wisconsin region, according to the latest report from the
Greater Milwaukee Association of Realtors.
Year-to-date, there were 17,300 homes sold in the four-county metro Milwaukee area, compared to 19,403 a year ago, and 18,188 in 2020. 2021 was the best year on record for home sales in the metro area.
“The upturn in interest rates that began in earnest last summer have started weighing down the market,” said GMAR president Mike Ruzicka. “Rates are 6% - 7% currently and were around 5% in June.”
While the metro Milwaukee home sale market has cooled, home sale prices in the metro Milwaukee area continue to increase, according to GMAR. In October, the average home sale price in the metro area was $344,104, up 9.4% compared to $314,660 a year ago.
“Some market-watchers may be expecting prices to decline as a result of recent headlines, but that is not the case,” Ruzicka said. “Realtors have been reporting solid interest among buyers, although first-time buyer searches have cooled down.”
Listings of homes for sale in southeastern Wisconsin in October were down 19.8% compared to a year ago. Ozaukee County was the only county in the region that had a year-over-year increase in listings.
“There are certainly inefficiencies in today’s market (i.e. lack of new inventory), however, we are nowhere near the start of another Great Recession in housing, because buyers have excellent credit, we do not have any speculative inventory, and employment is strong, among other factors,” Ruzicka said.
The limited supply of homes on the market is contributing to price increases, GMAR says. Ruzicka continues to say that more single-family homes need to be built in the Milwaukee area.
“The systemic problem with the market is the lack of new construction of single-family houses and condominiums, and over production of apartments,” he said. “That bottleneck combined with the demographic surge of Millennial and GenZ buyers and historically good interest rates have all contributed to an historically tight market. If the region does not create additional supply in the form of more single-family and condominium units, thousands of would-be homeowners will be forced to continue to rent, foregoing the opportunity to build wealth through a home’s equity and all of the other benefits of homeownership.”
