‘Inventory is ridiculously tight’
New home listings unlikely to pick up until spring

By Katherine Michalets - Special to The Freeman

March 5, 2015

 A sold sign hangs in front of a home on Niagara Road in Oconomowoc on Wednesday. Home inventory remains low and likely won't increase until spring, resulting in competitive bidding on homes for sale, according to industry experts.
Katherine Michalets/Special to The Freeman

WAUKESHA - For the first time in years homebuyers are placing competing offers on homes, said real estate agent Bob Larson with First Weber Group in Waukesha on Wednesday.

With “buyers coming out of the woodwork” and going to open houses, Larson said now is a great time to put a home on the market.

It might not be as good a time to buy, however, because home inventory is very low.

Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said inventory is really tight currently with about 4.3 months’ worth of listings.

In Waukesha County, there is only about 4.1 months’ worth of inventory, according to data from GMAR. In February, there were 2,098 active listings in the county, and of those, 485 had a contingent offer, resulting in 1,613 available listings. In addition, 398 homes sold in February, based on a 12-month average to limit seasonal disparity.

Winter tends to be a tight time for inventory, Ruzicka said, with some homes sitting for three months or more. Many families choose to wait until closer to the end of the school year to list their properties, leaving mostly people relocating in the search for a home.

However at the 4.3 percent level, “inventory is ridiculously tight,” Ruzicka said.

Larson said homes that have been sitting on the market for 30 to 90 days are being snatched up by buyers.

“It’s an excellent time to put a home on the market,” he said. “Interest rates are still low.”

As confidence grows in the economy, people are more willing to make the investment in a home, Larson said.

“We are not going to find an opportunity in our future where interest rates are going to be this low,” he said.

While buyers may be increasing their home search efforts in March with the intent to be settled in a house by summer, sellers are in a pause mode, Larson said.

“There are a lot of first-time homebuyers; they are not desperate,” he said. “If nothing else they are frustrated because there is not much to look at.”

According to the GMAR, January home inventory in Milwaukee and Ozaukee counties was down 5.5 percent and 2.8 percent respectively, but Waukesha County was up 3.3 percent. Washington County was up even more at 13.8 percent.
 

Buyers still thinking frugal

Six months of inventory is the tipping point for the market to go from a seller’s market to a buyer’s market, Ruzicka said.

Despite the statistics pointing to the current conditions being a seller’s market, Ruzicka said it doesn’t fit those traditional parameters because with the economy still recovering the mentality of buyers remains fairly frugal.

Ruzicka said buyers are offering 10 percent off the assessed value of the home, which may already be less than the asking price.

“There is a huge gap of what buyers and sellers are thinking,” he said. “It’s taking them a little time to come together.”

Homes that are in move-in condition and a good school district are also getting top dollar and all four counties in the metro Milwaukee area, Washington, Waukesha, Milwaukee and Ozaukee, are seeing an increase in home prices, Ruzicka said.

“I think it is going to be a pretty good year for sales and price appreciation,” Ruzicka said.

www.firstweber.com

www.gmar.com