Milwaukee Housing Market 2020: House Prices, Trends And Forecasts

Milwaukee housing market 2020
Wondering what the Milwaukee housing market 2020 trends will bring? Read our latest article to find out.

When considering the Milwaukee housing market 2020, it helps to understand a little bit more information about Milwaukee. Milwaukee is Wisconsin’s largest city, and the fifth-largest city in the Midwestern United States. It sits on the western shore of Lake Michigan, and if we look at its estimated population of around 600,000 people, it is the 31st biggest city in the United States. Having all this in mind, it is clear to see why the city is in constant need of a new real estate.

The new decade has started, but the real estate market’s problem still remains: the demand is constantly growing and the Milwaukee housing resources are often running low. With the rental prices rising, buying a home has become a difficult process, which means that the situation can be looking good for a real estate investors, at least according to the existing Milwaukee housing market forecast 2020.

Update May 2020 – COVID-19 Impact on the Housing Market

The housing market predictions for Wisconsin’s housing market looked good until the end of February 2020, when COVID-19 outbreak happened, first in Europe and then in the US as well.

Realtor.com did a report for April 2020 which shows that the housing inventory is continuing to decline ever since the global pandemic started. This was caused by two things. First off, there is almost no new houses being listed. People are afraid that selling their houses during the coronavirus pandemic will make them less profit. Secondly, a lot of people are de-listing their properties, afraid of open houses and strangers walking through something that probably still is their home.

According to the same report, housing inventory in the 50 largest US cities has declined by around 16%. At the same time, the US median listing price growth decelerates. The sellers aren’t ready to lower their prices, while the buyers decide to wait to see the full outcome of the COVID-19. The Coronavirus lockdown has caused the unemployment rate to rise to at least 10%, and tens of millions of residents are still wondering whether or not they will keep their jobs. These numbers are worse than the ones during The Great Depression.

These statistics make for a new challenge for everyone who is looking to buy or sell their property in the next time period. The impact of this pandemic is hard to predict. Some of the possible estimations is that the real estate market will, in time, go just above the rate of inflation while the prices for affordable and starter homes will rise, due to the rise of demand. This is further impacted by the increasing price of construction material, which would mean that the sellers and constructors would lose money after lowering the prices. The demand is rising while people are losing money and the prices of the materials are increasing.

However, the full impact is yet to be seen.

Luckily, if you are looking to sell a house – especially if you fear the upcoming foreclosure or if the mortgage rates became too high to handle – there are some real estate investors, such as Sparks Property Investors LLC, that still buy houses even during the COVID-19 pandemic.

Housing Market in Wisconsin

There is a number of factors that influence the Milwaukee housing market 2020, such as mortgage interest rates, employment, inflation, immigration, investments, government assistance programs and general health of local economy. Despite the mentioned Milwaukee housing market shortages, the research from January 2020 shows that Milwaukee managed to achieve a balanced market. What does that mean?

milwaukee housing market balanced market

A balanced market is a term that is used to describe the moment in the real estate industry when the supply is meeting demand. In other words, if a housing market is balanced, that means that the supply from sellers is equal the demand from buyers. Statistically, a balanced market usually has a total sales to total listing ratio between 0.12 and 0.2 (the ratio above 0.2 means that the market tends to favor sellers, while markets with a ratio bellow 0.12 usually favor buyers). Another classification states that the market is balanced when there is enough real estate inventory to last for at least six month.

In a balanced market, homes generally sit on the market for an average length of time for that region – on average, in Milwaukee homes sell after 72 days on the market while the prices remain stable and reasonable, and the buyers usually have a satisfying number of homes to choose from.

Milwaukee Financial Stats

Milwaukee ranks among the lower third on the list for living cost in the United States. It is often considered some of the most affordable, budget-friendly cities, with the average monthly expenses of $1,657.54. Also, the WisBusiness News is estimating that, in the light of the financial crisis, Milwaukee is in the top 17 “Rust Belt” cities for economic recovery. The research from the second half of 2019 shows that the incomes have grown by nearly 5% over the past decade. At the same time, the average Milwaukee family budget is $63k, with the overall unemployment rate of just 3.3%. However, with child care rates getting higher and higher, it isn’t too big of a surprise that even mothers are choosing to work rather than to stay home and to care for their children – as an average family spends in estimation around 10.5% of their income on child care (the percentage grows with the lower-income families).

Milwaukee Housing Market 2020

Having in mind past trends, buying real estate in Milwaukee can be a worthy investment opportunity. Back in the ‘70s, the city started to decline and the real estate market almost completely crashed. Also, there was the Great Recession, lasting from December 2007 to June 2008. Lasting for 18 months, this was the longest recession since the war, and it is estimated that the economy lost 8.7 million jobs. GDP growth had declined 8.4% yearly in the fourth quarter of 2008, and then by 4.4% in the beginning of 2009. All of this left big impacts on the real estate market.

However, the city is growing slowly but surely, and the demand is still a bit higher than the supply, the problem that probably won’t be solved soon. In fact, when it comes to housing market 2020 forecast for Milwaukee, the demand is indicated to continue to grow, and it is predicted that there will be an increase of around 2% in median home sales, with a 2% drop in median monthly rent.

When it comes to the real estate in Milwaukee, according to the FHA Q2 House Price Index report, house prices have increased for about 168% since the beginning of the ‘90s. In the last year, housing prices have increased by almost 30%. In different statistics, since the peak of the last real estate cycle, home prices have decreased by 13.4%, and since the last real estate cycle market bottom, they have increased by over 46%.

If we take a look at the Milwaukee housing market in 2020, we can see the following information:

  • Average home sale price in January was $124k, which is 3.9% higher than last year average.
  • This means that the average price for square feet is $93, 14.8% higher than last year average.
  • Since the beginning of the year, the houses usually stay 61 day on the market, which is less than the overall average time for Milwaukee, and they sell for about 3% bellow list price.
  • Attractive homes sell for about 1% above price list and go pending in around 40 days.
  • In just the last month, total of 347 homes was sold
  • According to Milwaukee Housing Authorities, it is supposed that there are less than 900 homeless individuals in the city area.

The average value of a home in Milwaukee is $130,294, which is 7.1% higher than the last year, and if it continues growing at this rate, it will rise for 5.4% more in this year. Still, the median price per square foot is lower than the average, standing at $106, and the median rent price is $1,075, or 1.04$ per square feet.

Also, the real estate offer varies in different parts of the city, and if we take a look at the Redfin.com site, we can notice the following:

  • The Southwest Side has 36 homes for sale, with an average price of around $158,000. Some homes get multiple offers, and homes usually sell for about 1% below list price after being on the market for around 56 days, while Hot Homes on average sell after 42 days for 2% above list price.
  • Walkers Point has 15 homes, with an average price of around $110,000, and they are mostly sold cheaper than the average list price.
  • Bay View being more expensive part of the city with 12 homes with an average price of approximately $229,000, but they still on average sell 3% under list price after 56 days on the market.
  • Downtown Milwaukee with astonishing 98 homes for sale with diverse prices ranging from $3,000 to $649,000. Most homes get more than one offer, but their time on the market is longer (86 days) and they also sell for about 3% below list price.
  • Jackson Park has fewer homes, with their average price of $158,000, and they usually sell for around list price, after 50 days on the market.
  • Morgan Heights usually has around 4 homes for sale, with their approximate price of $225,000. Homes usually sell for around list price and go pending in around 40 days, but the pending time is a lot shorter for Hot Homes which sell on average after 29 days, for 2% above list price.
  • Euclid Park will often have just one home for sale which can be sold even at a cheap price of around $32,500 – but usually, the average sale price is $175,000 and many homes get multiple offer, some with waived contingencies. Homes mostly sell for about 2.6% over list price and go pending in around 42 days.

When it comes to the neighboring cities, real estate price is quite high in Elm Groove, going as high as $4,100,000, and quite cheap in Wauwatosa, with houses being as cheap as $29,900. The price is most diverse in Muskego, going from $59,000 to $2,699,995. Cities with most houses for sale are New Berlin, with 89 homes for sale, and Oak Creek, with 102 homes. If we look into more details, we can say that:

  • Homes in Elm Grove get multiple offers and usually sell for about 3% under list price and go pending in around 67 days, but the pending time is a lot shorter for hot homes (37 days on average). The average sale price is $350,000, which is still a huge drop from the last year prices which were around 17% higher.
  • The average price for homes in Franklin is $229,000, homes sell for about 2% below list price and go pending in around 57 days after multiple offers, while hot homes can sell for around list price and go pending in around 38 days.
  • Wauwatosa homes have an average price of $231,000 that typically get one offer and sell for about 2% below list price and go pending in around 62 days.
  • Homes in West Allis often get multiple offers with waived contingencies and sell out for about 2% under list price and go pending in around 58 days, with Hot Homes selling for about 1% under list price, having spent 41 days on the market on average. The median sale price is $146,000, which makes an average price of square feet at $103.
  • Greenfield housing market is rather competitive, and many homes get multiple offers with waived contingencies. The average sale price is $182,000, which means that most of the homes sell for around 2% below list price and go pending in around 52 days.
  • Greendale homes sell for about 2% below list price and go pending in around 47 days, which is also similar for Hot Homes. The average sale price is $255,000, and many homes get multiple offers, some with waived contingencies.
  • Brookfield homes typically receive only one offer, and homes sell at an average price of $335,000, which is usually around 3% below list price and they go pending in around 66 days. However, when it comes to Hot Homes, they can sell for around list price and their time on the market is shorter, as they go pending in around just 46 days.
  • New Berlin has a big, competitive housing market and an average sale price of $300,000. Homes usually spend 54 days on the market and sell for about 2% below list price after receiving multiple offers.
  • Just like in New Berlin, the average house price in Muskego is $300,000, and homes also usually sell for about 2% below list price. However, their time on the market is quite longer, as they go pending in around 73 days – the time which is a lot shorter for hot homes, which go pending in around 45 days for around list price.
  • Muskego’s big market isn’t all that competitive, but their average sale price is quite high and stands at $555,000. Some homes get multiple offers and homes sell for about 3% sale price and go pending in around 83 days. Despite that, Hot Homes can sell for around list price and they go pending in around just 34 days.

Mortgage Rates

When it comes to Milwaukee mortgage rates on the site Realtor.com, current rates are 3.52% for a 30 year fixed loan, 2.90% for a 15 year fixed loan and 3.09% for a 5/1 ARM. The rates are slightly lower than the U.S. averages (2.97% for a 15 year loan, and 3.28% for a 5/1 ARM), except for a 30 year fixed loan which is average of 3.47%. Overall, the Wisconsin mortgage rates trend is not that much different than the U.S. average, which is closing in to the historic low. This, of course, helps both renters and homeowners who are pursuing to take advantage of those low rates, and it is presumed that most of renters are planning to purchase a house while the interest rates are not high. Actually, according to the Freddie Mac research:

  • 40% of renters plan to purchase a home;
  • 46% of owners plan to renovate their home;
  • 29% of owners plan to refinance;
  • 27% are planning to purchase an additional property;
  • 26% are planning to sell their home so they could purchase a smaller one, and
  • 24% are planning to sell their home so they could purchase a bigger one.

If all those percentages are confusing for an individual who isn’t that much into real estate, there are numerous mortgage rate calculators existing online, such as mortgagecalculator.org.

Also, an interesting information is that, when it comes to the so-called “Generation Z” buying houses, they are not likely to take advantage of the low mortgage rate environment, as most of them are stating their satisfaction with current living situation and prices and don’t plan on moving. At the same time, they state that there are many obstacles to them owning a home, such as an unstable economic situation and student loans. However, their self-estimated age at the time of their first home purchase is 30 years old, which is younger than the current national average of age 33.

Milwaukee Housing Market 2020 Forecast

Having in mind that the United States economy is now in its 11th year of growth – the longest in the U.S. history – the predictions about the real estate are looking good, despite a lot of people predicting the “Housing Market 2020 Crash” due to higher interest rates, risky financial products, tax reform plan and rising sea levels.

When it comes to the Wisconsin market forecast, we have to take several things into the account. First off, having in mind statistics that we have stated beforehand, we can see that we have a solid economy with low inflation, low unemployment, good job growth and 30-year fixed mortgage rates. Having in mind Wisconsin housing market trends, we can conclude that there is a feud between supply and demand in real estate; the demands are strong but the supply is weak, so the sales stagnate but the prices increase. Also, Wisconsin as a whole doesn’t have as balanced market as its largest city; in average, it has just four months of available supply and as such is classified as a seller’s market. The reason for this doesn’t lie in the growing demand, but rather in the limited supply of housing.

The Milwaukee housing market for 2020 is still slightly optimistic. We can see in the previous years that the number of the people from Gen Z buying houses has increased as they are moving away from their family nests and starting to live independently, and this rate will only keep increasing. Also, the mortgage rates are predicted to stay steady, which will keep housing in the country affordable. Taking all this into the consideration, it is supposed that the risk of recession in the coming year is quite low. The trend of Wisconsin housing market 2020 tells us that the real estate market will only go up, and the prices are predicted to keep rising as the demand, but also the finances of an individual, stay high.

Overall, the Milwaukee housing market 2020 trends can make it extra stressful when exploring the idea of selling your house. On top of the stress of selling your house, moving is never anybody’s idea of a great weekend activity and it is important to understand when to call a moving company. Just mention that moving is one thing that is a burden to you and Sparks Property Investors LLC can help you by moving all of your stuff for you! It is important to understand all of your options in this type of market. If you are looking for more ways to sell your house in this unpredictable market give Sparks Property Investors LLC a call at (262) 288-0580 or send us a message to discuss how to sell your Milwaukee house fast in Milwaukee, Wisconsin.

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2 responses to “Milwaukee Housing Market 2020: House Prices, Trends And Forecasts

    1. Hi Andrew! Thank you for reaching out to us. Monthly payments depends on a couple different things such as credit score and other debts you may have. Only after everything has been looked at and discussed with your lender would you know your actual payments. This would also depend on the type of property you would buy and when. Interest rates fluctuate and so does the prices of properties in that area.

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