JSOnline: City sets pace in home values - 5-year rise exceeds those of state, suburbs
The truth about today's real estate market!Economics 101
- Increase in property values (great news for sellers)
- Increase in competition (great news for buyers)
Recently, the U.S. Census Bureau reported that the real estate market in Wisconsin is still showing signs of growth.
In southeastern Wisconsin, although property values continue to climb, the rate of home sales have declined. Declining sales mean greater quantities of inventory for buyers to choose from. Assuming that homeowners who were planning to sell their homes in the near future decide to wait, it would still take approximately seven months to sell off our current inventory. Greater quantities of inventory mean greater competition for the same number of buyers. Greater amount of competition means that sellers must provide additional incentives for buyers to purchase their home.
The media has portrayed this phenomenon as the busted bubble. The real estate bubble has not popped. Sellers are still walking away with more money in their pockets than what they originally paid for their home. If this situation was the other way around, then yes, the bubble has popped.
What does this mean to you?
Again, the bubble has not popped. The Midwest, especially Milwaukee, has seen modest annual price increases in real estate. Unlike the more aggressively-priced markets (e.g. California and the East Coast), Milwaukee will continue to experience positive sales growth. In fact, the U.S. Census Bureau recently reported that Milwaukee home values continue to boom - almost matching the nation's 32% price run-up since 2000. Its mid-decade American Community Survey shows the U.S. median home value rising from an inflation-adjusted $126,733 to $167,500 from 2000 to 2005.
In the numbers
With the inflation adjustment, Milwaukee home values climbed from a median $79,600 in 2000 (equivalent of $90,232 in 2005 dollars) to $119,000 last year, a 31.9% increase that outpaced the percentage gains in most other Wisconsin municipalities. In comparison, Wisconsin (as a whole) saw median values climb 22.5% during the same period.
Michele Derus and Mike Johnson of the Milwaukee Journal Sentinel writes more about our today's real estate market. Click here for more information about our local real estate market – and how it compares to other parts of our state and the country>>>
posted by David Ray @ 11:12 AM
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