Report: Solid economy leads to increased home sales
Ozaukee County leads home sales at 5.3% increase, Waukesha County drops 1.1%

By Katherine Michalets - Freeman Staff

Sept. 12, 2017

MILWAUKEE — For the sixth month this year, home sales increased in August, according to data released Tuesday by the Greater Milwaukee Association of Realtors.

The number of homes sold in August in the metro Milwaukee area increased 1.7 percent compared to the same period in 2016.

“The increase in sales is particularly striking given that sales that occurred in August came from inventory that existed in June and July, when inventory was down 2.9 percent and 0.5 percent, respectively. In other words, buyers who closed in August selected their homes from a pool of homes that existed in the earlier summer months,” reads the report prepared by GMAR President Mike Ruzicka.

“August was the sixth month of the year that saw increased sales. The underpinnings of the local economy are solid, with employment, interest rates, and lending all performing well. The strong economy is producing interest in home buying, particularly among first-time buyers, who brokers estimate comprised 30 percent to 40 percent of the market this summer.”

Ozaukee County saw the greatest increase in sales for the four-county region in August with a 5.3 percent up tick. Milwaukee County sales went up 2.9 percent followed by Washington County at 1.8 percent. Waukesha County saw a decline, however, of 1.1 percent.
 

Listings

August, on the other hand, was only the third month of 2017 to have an increase in home listings.

“The growth in listings is a welcome change from what brokers have experienced. The extra listings will help Realtors working with buyers searching for a home,” Ruzicka wrote. “Based on a GMAR consumer survey conducted in May, some sellers stated they were holding off on listing until they could command higher prices. The August data indicates that many of those sellers are satisfied with the prices their Realtor is indicating their house is worth.”

In Ozaukee County, home sales increased 29.6 percent, followed by 9 percent in Waukesha County and 3.3 percent in Milwaukee County, all compared to August 2016. The number of listings tumbled in Washington County by 2 percent in August, according to GMAR.

Comparing 2017 to 2016, listings are up 0.7 percent, with 20,476 units in 2017 versus 20,324 units listed through August of 2016.
 

Tight inventory

Despite the increase in listings, the number of homes on the market remains slim. According to the GMAR, the seasonally adjusted inventory level for August was 4.9 months and the seasonally adjusted level was 5.8 months in August 2016.

“While the increase in listings in August is welcome, the drought in homes available for sale is still critical, leading to buyer frustration, particularly among those searching for homes under $350,000. Buyers are seeing properties snatched up before they’ve had an opportunity to view them,” Ruzicka wrote.

“Move-in ready” homes remain highly sought after and often receive multiple offers, according to the GMAR, but as much as they were in the early part of the 2000s, according to the report.

“The early 2000’s were marked by buyers irrationally bidding up home prices by 10 percent to 20 percent, assuming they would reclaim the value as the market appreciated,” Ruzicka report. “In the current market, buyers are bidding prices up, but they are constrained by their borrowing ability and their lender’s appraisal.”

Email: kmichalets@conleynet.com