The following information was provided by the Greater Milwaukee Association of Realtors.
Home sales were up in the Metropolitan Milwaukee market 10.8 percent for May. 1,880 homes sold in May compared to 1,697 the same month in 2014. Comparing the numbers to 2013, sales were up 2.3 percent (1,838 in 2013).
May was the fourth month of positive sales this year. Overall, the market is functioning very well, with one exception. Buyers are very active and some homes in “move in” condition are receiving multiple offers. However, inventory is still tight.
Once again, all four metropolitan counties were in positive sales territory, with Washington and Waukesha Counties leading the way with 34.2 percent and 19.1 percent, respectively.
In many instances buyers need to make a decision on placing an offer on a home fairly fast, due to a limited number of houses available in their market segment. This makes the research phase of home buying all the more important. Buyers should let their agent know what amenities they want in a home early in the process. For example, a buyer who wants to be 5 miles from work, or one who wants to be a block from a school, will impact their search areas.
Listings Increase
May was the fourth month of the year that saw listings increase, although it was basically flat from the year before. The two counties leading the way in sales, were also the two that had decreased listings in May.
Inventory
The seasonally adjusted inventory level for May was 7.6 months, just up from April’s 7.3 month level. The seasonally adjusted level was 8.1 months in May 2014.
Subtracting the 2,599 listings with an active offer from current listings presents an effective inventory level of 4.9 months, a hair higher than April’s 4.7 month level. Another sign of tight inventory is that the same calculation showed May 2014 at 5.6 months. According to the law of supply and demand, we should see price increases, because, a 0.9% increase in listings is not enough to satisfy market demand.
Market Challenges
Brokers are still reporting that some deals are falling through because of overly cautious appraisals. Some appraisers are using market data that is too old and does not reflect current market conditions, resulting in appraisals that do not reflect market conditions. This is a lasting result of the credit crisis and recession, which forced lenders and appraisers to be defensive in their estimates; however, that market is no longer present in 2015.