Milwaukee Home Sales Jump 18% in January

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According to the latest housing statistics by Metro MLS, a subsidiary of the Greater Milwaukee Association of Realtors (GMAR), the Metropolitan Milwaukee real estate market began the new-year on a surprisingly high-note, with January sales up 17.9% over January 2010.

The large increase was due to improved market conditions locally - terrific mortgage rates, a wide selection in all price categories, and prices down substantially from the mid-decade highs - that saw buyers taking advantage of the tremendous value in the market.

Additionally, there was a comparative lull in the real estate market in January 2010, which was a result of home buyers taking their time looking for homes between the expected end of the tax credit in November 2009 and the extended and expanded credit deadline of April 2010.

In the coming months comparative sales data should be down because home sales in the first half of 2010 were fueled by the federal homebuyers tax credits, which were particularly effective at getting first-time buyers into the market.  After the tax credits expired at the end of April, the market took a precipitous decline during the summer.

Over the longer-term, we expect the Southeastern Wisconsin real estate market to gradually improve.  The current market dynamics consisting of low mortgage rates, ample inventory of homes, and reduced prices will be a major incentive to home buyers currently sitting on the sidelines.  Additionally, beginning in 2011 the demographic wave of Generation Y buyers hitting the market will provide an extra boost to the market for years to come.

There are two clouds on the horizon that are limiting a faster recovery.  The first is overly tight credit; making it difficult for creditworthy borrowers to qualify for a mortgage.  A return to common sense loan underwriting standards would go a long way toward achieving responsible, sustainable homeownership.

Second is the number of appraisals coming in below a price negotiated between a buyer and seller.  Too many appraisals fail to provide accurate valuation, which is causing a steady level of sales to be cancelled or postponed.

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