After a dismal 2006, home resales in the metro area start off strong; industry experts are hoping it lasts
Sales of existing homes got off to a brisk start in metro Milwaukee this year.
“It’s like a light switched on,” industry spokeswoman Tammy Maddente said Friday.
In what many hope signals a housing market recovery, the region produced 971 January resales, or 3.9% more than a year earlier, Metro Multiple Listing Service figures show. That coincides with 3,355 new listings, or 4.8% more choices than a year earlier, in Milwaukee, Waukesha, Washington and Ozaukee counties.
“We had a pretty house, nice Lake Drive address, sitting on the market a year. Then, boom, it sold in January. And it was just like that for a lot of houses. They sat in ‘06. They sold in January,” said Maddente, president of Wauwatosa-based Metro MLS and executive vice president of First Weber Group.
Bob LaFond, loan officer at The Equitable Bank in Wauwatosa, said he’s witnessed the same phenomenon.
“A half-dozen of my customers have been trying to sell their houses so they could build another. Everything was sitting for months. Then suddenly, everything sparked up and they’re all getting sold – just in the last couple weeks,” LaFond said.
Like many in the housing industry, the lender isn’t sure why conditions soured last year.
“The economy was flying, interest rates were good, everything was good. There was no reason for the housing market to tank. But it did,” LaFond said.
A five-year housing boom abruptly ended last year as supply ballooned and demand evaporated. Trade group reports showed that home construction slumped 17.3% nationally and 25% in metro Milwaukee. Existing-home sales slid 8.4% nationally and 7.3% in metro Milwaukee.
Prices flattened and, in some locales, fell.
February keeping pace
One good month doesn’t spell recovery, industry representatives said. But so far, February is looking good, too. Long-term interest rates, employment numbers and consumer confidence are as good or better than a year ago, and inventories of unsold homes are shrinking, they said.
“Here’s what I see: The call rate into our office has increased substantially, appointments are up and a lot more buyers are out there,” said Gary Gerhardt, broker-owner of Re/Max Realty 100 in Brookfield. “That bodes well for 2007.”
Even bitterly cold weather couldn’t deter buyers, said Terry Donahue, president and chief executive officer of Prudential Absolute Realtors in Oconomowoc. “Everybody’s busy. People are writing offers. And if they’re writing offers at 30 below, they’ve got to be committed.”
Milwaukee is among the industry’s early reporters. “We’ve got our fingers crossed” that the same pattern will emerge elsewhere in the nation, said Walter Molony, spokesman for the National Association of Realtors.
“We do sense that we probably hit bottom in the fourth quarter of last year,” Molony said. “Our pending home sale index is up 9%, which indicates there will be modest increases for January. We see indications that buyers are getting back into the market in response to more competitive pricing and seller incentives.”
The big draw: better deals this year than in 2006.
“A property might be going at 98% of asking price, but that’s 98% of the last list price, not original price,” Maddente said. “That property might have been on and off the market two or three times.”
Home values have held constant, Donahue said. “What’s happened now is that we’re out of La-La Land and into reality.”
This year’s reality: “Panic mode is over and we’re now seeing signs of pent-up demand,” said John A. Inzeo, vice president of Wisconsin Mortgage Corp. in Brookfield.
“Sellers are smarter, recognizing (that) prices are flat. Buyers are being energized by extremely good interest rates, exceptional inventory and unprecedented good weather,” he said.
Good weather?
“Well, good weather until lately,” Inzeo said. “If it stays really cold, the market could be bumpy awhile. But I expect a good year – better than 2006.”
Source: Michele Derus JSOnline
