July Home Sales Down 5.2%
Market Highlights: 6th Decrease in 31 Months and Listings Down, Again
August 11, 2017 – Home sales were down 5.2% in July in the Metropolitan Milwaukee market.
|4 County Area||2,197||2,082||-5.2%|
The decrease in sales is not due to any weakness in the market, rather, there simply are not enough homes for sale to meet demand.
July was only the sixth time sales were down since January of 2015. All four metropolitan counties had a decrease in unit sales in July. Washington County led the way with a 14.8% decline.
There is no concern about the decrease among REALTORS®. 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 comprise about 40% of the market this summer.
Through July, the 4 county market is 0.8% ahead of sales in 2016, 12,083 in 2017 vs. 11,983 unit sales in 2016.
|4 County Area||2,583||2,569||-0.5%|
Listings Down in July, Again
July was the 5th month of the year with a decrease in listings in the 4 county area.
Milwaukee and Washington Counties increased listings, but there were not enough units available in Waukesha or Ozaukee Counties to satisfy buyer demand; particularly homes under $350,000.
Based on a GMAR consumer survey conducted in May, sellers stated they were holding off on listing because of concerns about policy changes in Washington, DC (i.e. mortgage interest deduction, taxes, health care), recent remodeling to their current home, and some are holding out for higher prices.
Comparing 2017 to 2016, listings are about even, with 17,813 units in 2017 versus 17,807 units listed through July of 2016, a 0.03% increase.
Inventory Very Tight
The seasonally adjusted inventory level for July was 4.8 months, down a bit from June’s 4.9 month level. The seasonally adjusted level was 5.8 months in July 2016.
Subtracting the 2,310 listings with an active offer from current listings presents an effective inventory level of 2.9 months. A year ago, the same calculation showed July’s inventory level at 3.5 months.
Tight inventory, plus high buyer demand is leading to increasing buyer frustration with the market, particularly among those searching for homes under $350,000. Buyers are seeing properties snatched up before they’ve had an opportunity to view them.
Many “move-in ready” homes are seeing multiple offers, but not the size or scale we saw in the early part of the last decade. The early 2000’s were marked by buyers irrationally bidding up home prices by 10% – 20%, assuming they would reclaim the value as the market appreciated.
In the current market, buyers are bidding prices up, but they are constrained by their borrowing ability and their lender’s appraisal.
Where to go
Buyers should seek the counsel of a REALTOR® in determining their best housing options, and sellers need a REALTORS® expert advice in making correct marketing decisions with their home.
The Greater Milwaukee Association of REALTORS® is a 4,000-member strong professional organization dedicated to providing information, services and products to “help REALTORS® help their clients” buy and sell real estate. Data for this report was collected by Metro MLS, Inc. a wholly-owned subsidiary of the GMAR.
* Sales and Listing figures differ between the “Monthly Stats” and “4th qtr” (or year-end) because the collection of “Monthly Stats” ends on the 10th of each month; whereas the “4th qtr” is a continuous tally to 12/31. For example, if a sale occurred on July 29th, but the agent does not record the sale until August 11th, that sale would not be included in the July sales figures (or any subsequent month’s total) but would be added to the annual total sales figure in the “4th qtr” total.