Residential real estate market returning to ‘normal’
2015 predicted to be a positive year by industry experts

By Katherine Michalets - Special to The Freeman

Jan. 14, 2015

 This home at 336 N. Racine Avenue is for sale at $179,900.
Charles Auer/Freeman Staff

BROOKFIELD - Real estate data discussed during the Greater Milwaukee Association of Realtors’ economic summit Tuesday indicate that the housing market is continuing to make strides after the Great Recession and 2015 looks to be a promising year.

In fact, December was the market’s strongest month in 2014 with home sales increasing 6.6 percent and prices increasing in Waukesha, Washington, Ozaukee and Milwaukee counties, according to data released by the GMAR on Tuesday. 1,252 homes sold in December compared to 1,174 during December of 2013, according to the organization.

Overall, the GMAR reported that 2014 took a 2.5 percent dip in total sales with 17,749 properties sold, compared to 18,203 in 2013.

Mike Ruzicka, president of the GMAR, gave a presentation to a roomful of real estate agents at the Brookfield Sheraton on Tuesday.

Ruzicka described 2014 as the first “normal” year in a long time regarding properties on the market. He said the market changed from one filled largely with distressed properties (foreclosures and short sales) to a more traditional market with first-time homebuyers, move-up buyers with children looking for a larger home and empty-nesters looking to move into a smaller home or condo.

Home listings also increased during the past 10 of 12 months for a total of 28,052 homes listed for sale in 2014 in the four-county region, Ruzicka said. That’s an increase of 3.8 percent compared to 2013.

 

‘Things are moving in exactly the right direction’

Michael Kellman, senior vice president of consumer lending at North Shore Bank, said there are some upcoming changes that will affect real estate agents and buyers. Some documents related to home sales are changing, including a new loan estimate that will replace TIL and GFE forms, as well as a closing disclosure that will replace the TIL and HUD1 forms. The changes will take effect Aug. 1 and are intended to improve consumer understanding and prevent surprises at closing, he said.

He also said statistics show that people with strong credit scores are looking for houses and Wisconsin had the highest average credit score in the United States in July 2014, according to the U.S. Department of Housing Reports.

“Things are moving in exactly the right direction,” Kellman said of the real estate market.

David Clark, a professor of economics at Marquette University, said median home prices are up nationally by 5 percent with a median home price in November 2014 being $205,300.

The real estate market also remains a buyers’ market, Clark said, with an average of 5.1 months of home supply at the national level. Anything under six months is considered a buyers’ market, he said. In Wisconsin during December, the average time on the market for a home was 117 days, Clark said.

Overall, he is predicting that the housing market will see modest growth in 2015. Working against the market is that qualifying for a mortgage has become more difficult, mortgage rates likely will increase slightly, there is a minor reduction in affordability and student debt is weighing down buyers.

On the positive side, a Republican-controlled Congress will dampen regulatory controls, there is no longer a recession, modest economic and job growth are predicted and there should be sustainable growth in home prices in excess of home inflation in 2015, Clark said.

 

By the numbers

* 6.6 percent increase in home sales for Waukesha, Washington, Ozaukee and Milwaukee counties when comparing December 2014 to December 2013.

* 347 homes sold in Waukesha County in December. 291 homes sold in the county in December 2013.

* 2.5 percent decrease in home sales for the four-county metro Milwaukee area during 2014. In Waukesha County, home sales decreased by 1.2 percent for the year.

* $282,760 is the average home price in Waukesha County in 2014, compared to $276,007 in 2013, a 2 percent increase. Milwaukee County had the largest increase in 2014 of 6 percent when comparing the average sale price of $149,607 in 2014 to $141,598 in 2013.

Source: Greater Milwaukee Association of Realtors

www.gmar.com