Let’s talk about the basics!
First and foremost, because everyone is talking about real estate “market trends” let’s define what that really means: Housing Economics. Other words: Demographics (age of homeowners, income, jobs) AND affordability – aka mortgage rates.
Secondly, for those looking to define market trends in YOUR local market, do not rely on headlines. Look for local statistics. When you have questions about your neighborhood and are wondering if buyers are in the market and sellers or planning to sell; avoid broad news headliners that lead to false information. Local historical data is important, and local demographics are key.
Additionally, find someone you trust to provide local data before you make any big decisions.
So Let’s Get Real About Current and LOCAL “Trends” – Real Estate Crashes and more…
We follow real estate experts such as Logan Mohtashami, a well-respected real estate economist. He recently shared the following, which we find very relevant to/for our local market. These reminders are important to consider when looking for real estate advice and expertise. He takes a peak backward into historical patterns; as well, realistically addresses the market shift with the economy in mind.
Two Simple Facts/Information:
- When it comes to household formation and how it relates to real estate predictions: People date, marry, have kids, maybe have more kids, and buy homes. That story continues from generation to generation. We knew that the millennial generation would be investing in real estate heavily in 2020-2024. This doesn’t even begin to address baby boomers and their great need for change: condominiums, single-story homes, smaller living quarters, etc.What does this mean for our local market: These two generations alone are both buyers and sellers that remain in today’s market. That is not changing anytime soon. These are not insignificant volumes of people aka buyers and sellers.
- Crash or no crash? We ARE NOT seeing bad credit, foreclosures, and bankruptcies. We ARE seeing a strong job market and strong household incomes. Interest rates are “lower,” relatively speaking. This means we’re seeing a very different economy and homeowner demographic, today than we did in 2008. This speaks to the strength of our real estate market, today, as well as why we are not headed for another crash.What does this mean for our local market? Again, this is all very true to our local economy, neighborhoods, and homeowners. We see Wauwatosa, Elm Grove, Brookfield, Pewaukee, and all surrounding communities to have very solid – consistent income streams, with a great amount of future job security.
Let us get down to stats!
Local Reality for Milwaukee & Waukesha Counties
Active Listings: July 2021 – 8015 homes were active / July 2022 – 6787 homes active.
Active listings went down, meaning inventory is down but not by enough to raise concern. This tracks with the predictions just covered. We are currently in recovery mode with strong demand.
- Market Supply/Months’ supply of listings: In July 2021 we had about 1.6 months of inventory on market. In July 2022 we had about 1.5 months of inventory on market. This is down 1.3%, so is about even / remaining consistent. A balanced market is 6 months of inventory on the market. So, we need more homes to sell. It’s still a good time to put a house on the market because inventory remains low.
Sales Absorption Rate: This is the percentage of inventory going under contract: July 2019 – 31%. July 2020 – 31%. July 2021 – 36%. July 2022 – 36%. This is holding steady. In general, through early July of this year, the market has operated very similarly to that of last year. Another good sign.
Stay tuned for continued local updates, from your friends here at Double Boldt Real Estate – where we care deeply about you, your family, and your home. We are committed to your bottom line and providing a smooth, custom-tailored experience for you and your family, as well as relevant, honest market analysis.