Milwaukee's Housing Market – Steady as it GoesMarch 15, 2008 (Waukesha, WI) – March 15, 2008– There has been much media fan fare and speculation about the state of the nation's housing market and the local housing market in Milwaukee. Admittedly, the housing market has cooled across the nation and in Milwaukee from consecutive record setting years to more average and typical levels of construction activity. This return to a normal level of activity was expected, and quite frankly, occurred later than many industry professionals had expected. However the headlines often read “New Home Construction Down”, which creates a false impression that the housing market is not a strong foundation. Nothing could be further from the truth, especially in Southeastern Wisconsin. The following points clearly illustrate that our local housing market is on a solid foundation with the four fundamentals in the construction industry: Interest Rates While they have increased from historic lows around 5.5%, most everyone agrees that a rate between 6 and 6.5% is still a very attractive rate historically speaking. From January 1971 to September 2001 (a 30 year period), there have only been 11 months when the rate was below 7.0% according to a Freddie Mac survey – September 1993, October 1993, and a period from July 1998 to April 1999. While we have enjoyed consecutive years of extremely low rates, today's rates are still very attractive at around 6%. Absence of Investors Many markets are dominated by speculation building while the Milwaukee market has historically had very low levels of speculative building. Markets that have a lot of speculative building do experience much greater fluctuations in their housing markets. The Milwaukee market simply does not experience big swings in activity. Demographics Our region is growing and is expected to continue to grow. Estimates by the Southeastern Wisconsin Regional Planning Commission expect a growth of 344,800 individuals by 2035 (an 18% increase) and an additional 176,600 households in this region by 2035 (a 24% increase). As a result, there will be continuing demand for housing in SE Wisconsin in the foreseeable future. Job Growth This region is also experiencing job growth and is expected to continue to see job growth into the future. Estimates by the Southeastern Wisconsin Regional Planning Commission expect an additional 145,000 jobs in the region by 2035 (a 12% increase) with the possibility that this number could double. A strong job market and a strong housing market often feed off each other and spur greater growth. There is no doubt that the region's housing market is built on a strong foundation and likely has record setting years ahead of it. While the market has cooled from the recent record setting years and returned to an average activity level, homes are still appreciating in this region, just at a more sustainable rate. As a result, your home is still a very safe place to put your money. Sources: SEWRPC 2035 Land Use Plan and Fannie Mae
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 Our builder showed us how we could get into the school system we wanted and a home that’s flexible enough to accommodate our growing family. We’ll be closer to work, and we’ll also save energy on our utility bills. It’s a win – win for everyone. The kids can’t wait to explore the new neighborhood and we can’t wait to settle in. To think, we almost stayed away from building a new home because we were worried about the mortgage crunch. When we discovered that 99% of homes are not in foreclosure; that made us feel secure in our investment too. |
