Milwaukee Condo & Real Estate Scene

If You're Not Selling In This Market, Then You're Doing It Wrong

There are many factors in real estate that determine value.  Zestimates are not one of them.  Some of the key components for successful valuation include:  Location, condition, size, room count, floor plan, age of home, view, builder/developer reputation, unemployment, mortgage rates, consumer confidence, etc.  For units located in condominium associations, you can also add the financial strength of the association.  Every property will excel in a few areas; but, it is unrealistic to think that every property will excel in all.

I recently analyzed inventory levels of condominium units located in the 53202 zip code (which is the main zip code of downtown Milwaukee).  I wasn't looking at any particular price point during this analysis; therefore, this analysis includes units as small as efficiencies and units as large as penthouse units in luxury high-rise buildings.  (Disclaimer: The results discussed throughout this blog was supplied by Metro Multiple Listing Service ("MLS"))

If you are attempting to sell your unit in today's market and you're not successful in attracting a buyer to your unit, then you're not doing something right.  It might be that you incorrectly valued your unit.  It might be that you implemented inappropriate negotiating skills when you received an offer and it failed to come together.

A condominium owner who attempted to sell his or her unit in 2010 was twice as likely to fail than an owner in today's market.


July 2010

* 53 new listings entered the market during the month
* 10 owners were successful in closing their deal
* An owner who was trying to sell his or her unit joined 537 other owners who were trying to attract a buyer

Metro MLS computed 53.80 months of inventory in July 2010.  In other words, based on our inventory levels in July 2010, it was projected that our inventory levels would have cleared in roughly 54 months assuming that none of the other owners entered the market.


July 2011

* 34 new listings entered the market during the month (36% fewer new listings than reported in July 2010)
* 20 owners were successful in closing their deal (twice as many as reported in July 2010)
* An owner who was trying to sell his or her unit joined 410 other owners who were trying to attract a buyer (23% fewer competitors than reported in July 2010)

Metro MLS computed 20.55 months of inventory in July 2011 (four-plus years of inventory to less than two years in one year's time).


June 2012

* 27 new listings entered the market.  Typically, the summer months are considered the "busy season" for real estate.  Encouraging condominium owners to enter the market has been a challenge during the past 12 months.  Financially, many owners will be taking a loss on the sale of their units.  On the other hand, condominium unit owners are likely to succeed in selling their units in today's market as there are fewer owners to compete.

* 33 owners were successful in closing their deal.  During the past two years, there were three months when closed deals exceeded new listings (December 2011, April 2012, and June 2012).  Although, supply of available condominium units are decreasing, units sold are increasing.  Today's buyers have fewer options available to them than buyers who were in the market in July 2010.  The key difference is that today's buyers are buying.

* An owner who was trying to sell his or her unit joined 285 other owners who were trying to attract a buyer (nearly half as many competitors than reported in July 2010)

Metro MLS computed 8.67 months of inventory last month (four-plus years of inventory to less than a year's worth in two year's time).



If you were one of the 33 unit owners who succeeded in closing your deal last month, then congratulations!

If you're still on the market, then you should review your marketing plan and pricing strategy to determine if any changes are needed.

If you're on the fence about selling your unit, then the results of this report should provide you with a sense of cautious optimism.  We're not out of the woods yet, but it appears that we're moving in the right direction and leveling the playing field.  The balance of power shifted slightly in favor of sellers during the past few years.  It is still a buyer's market and buyers are still influencing the direction of negotiations.  However, with an aggressive marketing plan and implementing an appropriate pricing strategy, you may find that you're more likely to sell in today's market than your counterpart a year ago.  With buyer demand on the rise, you may even experience a bidding war.






This analysis looks at one particular sub-market in Metro Milwaukee.  The downtown condominium market has experienced some significant swings in values over the past decade.  Your sub-market may reflect different results.

Please contact me at dray@shorewest.com if you have any questions regarding the real estate market in Metro Milwaukee.


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Labels: Real Estate

posted by David Ray @ 9:14 AM