Mixed January Report: Metropolitan Milwaukee Real Estate Market Shows Modest Growth

It’s a mixed January report from real estate experts.  The Greater Milwaukee Association of Realtors report that in January, the area saw a 4% increase in sales compared to last year. However, when breaking it down, the counties of Milwaukee, Washington, and Kenosha saw positive growth in sales, with Ozaukee and Walworth seeing declines.   The realtors say the systemic problem with the market is the lack of new construction of single-family houses and condominiums. 

In January, home sales in the Metropolitan Milwaukee market area showed a modest increase, with 848 sales recorded, representing a 4.3% rise compared to the same period in 2023. However, this growth is overshadowed by the fact that sales in January 2023 were exceptionally low, making the 35 additional sales in January 2024 welcome but still significantly below the market’s recent average of 1,000+ sales.

There was a positive development in the form of a 12.4% increase in listings, marking a 6-month streak. But when considering the additional listings in context, the market still lags behind in meeting buyer demand, highlighting the urgent need for more listings to satisfy the market’s requirements.

The market’s inventory in January stood at 2.3 months, indicating a very tight market in favor of sellers. When factoring in listings with an offer, the rate fell to 0.9 months, further emphasizing the challenging conditions for buyers. Additionally, the most surprising statistic in this month’s report was the 2.2% decrease in prices, with the average price dropping from $336,306 to $328,745. Despite this decline, prices remain competitive, especially among first-time buyer price points.

Looking at the sales performance across different counties, Milwaukee experienced a notable 9.2% increase, while Washington and Kenosha also saw positive growth at 1.6% and 6.1% respectively. However, Ozaukee and Walworth recorded declines of 16.9% and 8.0% in sales, contributing to the mixed performance across the region. In terms of listings, Milwaukee and Washington counties saw substantial increases of 17.9% and 43.8% respectively, while Waukesha and Ozaukee experienced slight decreases of -4.2% and -6.9% respectively.

The market’s challenges are further compounded by the low production of new construction units, with only 1,624 new home construction permits taken out in the 4-county area in 2023, far below the 4,000+ units needed to meet demand. This, combined with the disincentive for current homeowners to move due to low mortgage interest rates, indicates that achieving a balanced market to benefit buyers in the near future is unlikely. The lack of new construction of single-family houses and condominiums, coupled with the demographic surge of Millennial and GenZ buyers, has contributed to a historically tight market, posing a significant challenge for thousands of would-be homeowners.