Housing Market Edges Upward, While Foreclosures Still A Plague
There is increased movement in the local housing market. While mortgage rates tick upward, more homes are selling in Wisconsin.
WUWM’s LaToya Dennis provides a snapshot of trends here. She found cash flowing more freely for purchases, yet a sector still battling foreclosure.
For sale signs dot neighborhoods in Whitefish Bay and Fox Point. Milwaukee’s north shore suburbs are desirable locations, according to Barb Bailey. She’s a realtor with Shorewest. Bailey is preparing to show a house in Fox Point.
The house has three bedrooms, two full baths and 2100 square feet. It’s listed for $399,000.
“It’s a lot of house for the money. And the charm is the most important feature I think, of this house,” Bailey says.
The median home price here is up nearly 11 percent since last year. Bailey says prices are still nowhere near the levels of 2007 – before the economy crashed. But people have finally gotten antsy.
“It’s a good time to sell because prices are up and there’s low inventory. So that’s good for the sellers, not good for the buyers, because they’re fighting over houses,” Bailey says.
Bailey says bidding wars today often top the asking price.
“It started in the $200,000 price range, where things started selling. Then as those people sold their houses, they moved up to the $300,000 and $400,000 price range. So those houses became a pressure on those houses and we’re getting up there now,” Bailey says.
What’s helping fuel buyers right now is relatively cheap money. Though the interest rate on a 30-year mortgage is at its highest level in two years – 4.46 percent.
Jeff Joseph is past chairman of the Greater Milwaukee Association of Realtors. He says low interest rates coupled with smaller down payments have people ready to buy.
“Three-percent to five-percent is probably more normal. Upper price ranges, 10 percent-20 percent is more the norm,” Joseph says.
Dennis: “What’s an upper price range?”
“You get above half a million dollars or so and you’re seeing people who generally put down larger percentage down payments,” Joseph says.
While buyers are putting down less than the customary 20 percent, Joseph says he’s not concerned that another housing bubble might develop. Prior to the recession, some lenders extended credit to people, unable to afford it.
“It’s so different this time than the bubble, from 2004, 2005, 2006, in that the growth is much more organic. It’s not being artificially extended by lending. The loans that are being made today, are much stronger,” Joseph says.
Plus Joseph says demand isn’t as fevered as it was then; it’s driven more these days by pent-up demand. People have been waiting for years to buy and sell.
There are others however, still struggling to hang onto their homes. The lingering effects of the recession and bad lending continue taking a toll.
Kristen Venkler is a home ownership preservation officer for Select Milwaukee. It offered mortgage guidance on a recent Saturday morning, at Washington Park Senior Center.
Nearly 20 people arrived, shortly after the doors opened.
“A lot of people are suffering due to changes in the economy, due to changes in personal situations. A lot of people are still going through hardships and making their mortgage payment is still a concern for many families,” Venkler says.
Right now, the City of Milwaukee owns 1,200 foreclosed homes because of unpaid taxes. Leaders expect the number to double, by the end of the year.