Millennials or aging baby boomers? Experts disagree on why the building boom.
Millennials or aging baby boomers? Experts disagree on why the building boom. Back to the full article.
You must be an Urban Milwaukee member to leave a comment. Membership, which includes a host of perks, including an ad-free website, tickets to marquee events like Summerfest, the Wisconsin State Fair and the Florentine Opera, a better photo browser and access to members-only, behind-the-scenes tours, starts at $9/month. Learn more.
If you are an existing member, sign-in to leave a comment.
Have questions? Need to report an error? Contact Us
The construction of these apartments is driven by developers and analysts speculating about future events. Maybe wait until all these new units are occupied before you call it a trend.
And why on earth would a Boomer downsize from home ownership to a luxury *rental*?
@Prickly It is already a multi-year trend. And I don’t know maybe, less hassle, better finishes, more amenities, ability to walk to just about anything… A lot of reasons.
Yes, this has been going on for a decade now. I’d say that qualifies as a trend. I wish some of these people would start buying single family homes instead so I can gain some equity in my house and refinance!
The numbers from Marcus & Millichap seem way off. An $1,179 monthly PITI with a down payment of 20% (which nobody does 5%-7% is normal) and a 5% interest rate would mean a purchase price of around $185,000 which is about 75% higher than the median home value in Milwaukee. I work as a housing counselor in Milwaukee and am constantly amazed at how little developers understand about the city, especially those that cater to high end clients. They live in a completely different world than the rest of us.
I’d like to know the income levels of the people moving into these new apartments. The “$965 a month” average figure is for what? A 1 bedroom? Or is that just total?
I know none of the new apartments built in the last few years have rent lower than that, for a studio or a 1 bedroom.
@Emmett – The numbers apply to the region, not just the city proper. I wasn’t able to find a reliable figure in a quick search for what the average sale price of a home in the past year in the Milwaukee market is.
@jeramey I guess if it includes the region the prices are about right. The 20% down still seems strange and out of date, though. That would require $37,000 on a $185,000 house. I can’t understand why they would assume that kind of down payment in their affordability calculations.
20% down means you can avoid mortgage insurance payments. We put 20% down on our house, although the price of our home was WAY lower than the average home sale price for the region. I think leading up to the 2008 bust no one put 20% down, but it may be getting more common now. However, I don’t have any data to back that up.
For me, it doesn’t make sense to buy, especially since I’d be looking at a condo. Property taxes are high enough to the point where taxes+HOA dues+interest will be greater than the rent I pay each month for my apartment. Since those expenses aren’t equity building, and condos seem to appreciate very slowly around here, buying doesn’t make much financial sense.
So I continue to rent.
Everyone can see that new condos and rentals are being built everywhere. If there is a shortage of new homes for buyers, and there is a glut of condos and rentals, why aren’t banks building new houses instead of condos and apartments?
@James, Bank’s do not build anything, they finance the construction. If Bielinski, Veridian, and others are building homes, they are likely receiving Bank financing in some form.
I don’t think anywhere in the article did they mention a glut of units currently, as they discuss vacancy rates being at historical lows. There are pretty solid single family building permit numbers in the Metro, but they are all out in the suburbs. I may be missing a small project, but the last built condominiums in downtown Milwaukee were either Moderne or The Breakwater with prices are out of reach of the average renter.
As someone who works in the industry, I am continually becoming surprised at the lofty rents the downtown units are commanding. Considering wage demographics, I am skeptical that there is an endless supply of people who can pay $2 per square foot for their habitation.