Milwaukee Area Home Sales

Down 31% in April, As Expected

Sales in the Metropolitan Milwaukee real estate market are progressing well despite the appearance that the market is declining. Home sales were down 31.3% in April, according to housing statistics released today by Metro MLS, Inc., but that decrease is in comparison to the tax credit fueled market of April 2010.

The decrease was completely expected, given the huge run-up in sales in the first half of 2010 brought on by the last version of the federal homebuyer tax credits.

Sales were just slightly behind the same period in 2009 (-6.2%, or 71 sales), when a first-time homebuyer tax credit was also in place.

Brokers have reported that the sales of higher priced homes have increased and been steady this spring, in contrast to 2010 when lower priced homes sold in the first-time buyer frenzy. They believe this is due primarily to the discounts the market has provided in the high-end price range.

A comparison of the ratio of listings to sales shows that the market is about where is was in 2007. Taking the number of listings, 2,828, and dividing by the number of sales, 1,069, yields a ratio of 2.65. This ratio provides a rough idea of how sellers and buyers are responding to current economic and market conditions. Here are the ratios for April over the last 5-years:

In the county-by-county analysis:

• Milwaukee County was down in sales by 31.2% for the month.
• Waukesha County was down 28.2% for April.
• Washington County had a difficult month coming in at 44.0% behind.
• Racine County was down 24.5%.
• Ozaukee County was down 26.5% in April.

The coming months will tell a similar story: Improving economic and employment climate leading to more real estate sales, but statistically appearing to be down due to the stimulus the federal tax credits provided in 2010. While the market needed the added stimulus of the tax credits in 2010, today it is strong enough to stand on its own.

Despite mortgage rates that are historically low, getting through the origination and underwriting process is testing many buyers’, sellers’ and REALTORS® patience.

The Metropolitan Milwaukee marketplace has 12.3 months of inventory, down slightly from March’s 12.5 month level.