September sales of existing homes dipped 1.1% in metropolitan Milwaukee, but an ongoing scarcity of properties on the market has continued to drive up prices in most communities.
A report released Thursday by the Greater Milwaukee Association of Realtors shows there were 1,823 closings on home sales in Milwaukee, Ozaukee, Washington, and Waukesha counties last month, compared with 1,844 in September 2016.
Sales rose 1.3% in Milwaukee County, to 1,004 from 991, and by 20.4% in Washington County, to 218 from 181. But an 11.9% drop-off in sales in Waukesha County, to 487 from 553, and a 4.2% dip in Ozaukee County, to 114 from 119, took the overall sales figure for the area into negative territory for the month.
In the past 33 months, it was only the seventh time year-over-year monthly sales declined in what has been a very hot market for move-in ready, reasonably priced houses in the metro Milwaukee area. Through the first nine months of 2017, sales were up 1% in the four-county metro market.
In his monthly report, Mike Ruzicka, president of the local Realtors organization, said sales likely fell in Ozaukee and Waukesha counties because those counties have mostly exhausted their inventory of houses priced at less than $350,000.
“Tight inventory, plus higher buyer demand, is leading to increasing buyer frustration with the market, particularly among those searching for a home under $350,000,” Ruzicka said in his report. “Buyers are seeing properties snatched up before they’ve had an opportunity to view them.”
He said that although move-in ready homes are seeing multiple offers, the bidding is more rational than in the early 2000s, when buyers bid up home prices by 10% to 20% on the expectation that prices would continue to appreciate.
“In the current market, buyers are bidding prices up, but they are constrained by their borrowing ability and their lender’s appraisal,” Ruzicka stated.
Through the third quarter, the average home price was up at least a little in each county.
In Milwaukee County, the average sale price through the first nine months of 2017 was $178,254, compared with $177,059 in the same period last year, for a 0.7% gain.
Waukesha County saw the largest average sale price increase in the first three quarters of 2017, up 7.2% to $321,272 from $299,577. The average price rose 3.9% in Ozaukee County, to $326,371 from $314,097 in the same period in 2017. In Washington County, the average home price was $236,470, a 3.6% jump from $228,345 a year earlier.
Combined, home prices in the metro area increased 4.2%, to $265,592 from $254,770.
Average prices in Ozaukee, Washington, and Waukesha counties now have passed their pre-recessionary peaks, but Milwaukee County still has ground to make up. The average price in Milwaukee County is about 7.3% less than its 2007 peak.
“While Milwaukee County did not surpass its pre-recessionary peak, it also has the largest housing stock and will take longer to make the turn,” Ruzicka said.
This article was originally published in the Milwaukee Journal Sentinel.