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Luxe Living
With the high-end home market on the rebound, inventory becomes tight

By REBECCA KONYA

March 2014

Shopping for a luxury property? You’ll be hard-pressed to find one in the Milwaukee area. There’s a historically low supply of high-end homes available. Of the 180 active properties listed in the Milwaukee area at the start of 2014, only 15 of the properties listed fell in the moderate high-end range of $700,000 to $1 million, and just 11 properties had a price tag of $1 million-plus.

Milwaukee area had nearly 1,300 home listings. The dramatically reduced supply is helping stabilize housing prices in the Milwaukee market, says Mary Beth Waite, owner of Metro Condo Connections, though she admits the limited choices can be frustrating for buyers. "We’re seeing multiple bids on properties," she says.

Luxury Defined

Although properties priced at $700,000 or more are generally considered high-end in the Milwaukee area, Waite says the local luxury real estate market isn’t strictly about price point. "The real difference is the level of construction and quality of the finishes," she says. "It’s like assembling a great outfit. You can have a fantastic dress, but the shoes and accessories make the ensemble."

Katie Falk, a broker with Coldwell Banker in Glendale, concurs. "Buyers today are much more sophisticated than they were 20 years ago," she says. "They want exceptional quality like top-of-the-line finishes and amenities."

That said, with the shortage of luxury properties on the Milwaukee market, buyers now are more willing to consider something that isn’t move-in-ready. "That’s the biggest change we’re seeing in the luxury market," says Richard Ruvin of Circle Realty Milwaukee.

With the market in their favor during the last five years, buyers tended to overlook properties in need of improvements. But record-low inventory is changing that mindset. "Now buyers are willing to make compromises," Ruvin says.

Slow Recovery

Despite the recent spike in buyer interest, Ruvin says the Milwaukee luxury market has been the last to fully rebound. "Usually, it’s the first to heal, but this time it’s lagging," he says.

Unlike Milwaukee’s regular housing market, which showed signs of recovery at the end of 2012, Ruvin says the luxury market didn’t start coming around until late last year.

Falk agrees that the luxury market in Milwaukee languished longer than the standard market, but has confidence 2014 will be a good year. "We’re seeing a wonderful rebound now," she says. "Inventory is low, but getting better. We expect to see an increase in March or April."

Confidence Driving Sales

First Weber Group Realtors’ Associate Vice President Cindy Fleming attributes the luxury market’s rebound to growing consumer confidence. "The local economy is continuing to improve and that’s fueling consumer confidence," she says.

Along with rising consumer confidence and shrinking inventory, low interest rates have also had a positive impact on luxury home sales. "Rates are better than they’ve been in decades," says Falk. "You can typically find 4 percent now."

Ruvin says he’s getting a lot of calls from local lenders seeking to work with high-end buyers again. After the housing market peaked in 2006, lenders seemed to shy away from buyers with high net worth and incomes. "Now they’re looking to rebuild those relationships they lost in the downturn."

 







 


This story ran in the March 2014 issue of: