What a difference five years makes.
A half-decade ago, with the housing marking meltdown still visible in the rear-view mirror, home searchers in the Milwaukee suburbs had their pick of properties. Prices were attractive. Inventory was high.
Now, not so much.
The economy’s improved, inventories have shrunk and homes are getting snatched up twice as fast as they were five years ago – and it’s not just starter homes fueling the charge; well-to-do locations like Chenequa, Wales and Bayside are among the biggest gainers. Housing prices are surging, too, with suburbs as different as West Milwaukee and Oconomowoc Lake leading the charge.
To find out which suburbs have bounced back best, Now News Group delved into single-family home sales data for a pair of one-year time periods, one from five years ago – May 2012 to May 2013 – and another from this past year – May 2017 to May 2018 – to see how the suburban housing market has changed.
We focused on three areas: number of home sales, home sale price and days spent on the market, and how much each has changed over the five years.
Time on market plunges
When it comes to the decrease of the average number of days homes spend on the market, Chenequa leads the pack.
Five years ago, a single-family home in the well-to-do community languished on the market for an average of 451 days. Today, homes there are turning around in about 283 days, a 168-day drop that’s tops among the suburban communities.
Wales is next, falling from 220 days to just 58 (162-day difference), with Summit, Bayside and Thiensville rounding out the top five.
In fact, the amount of time houses have spent on the market has gone down in each of the 52 communities we looked at and is perhaps the most dramatic indicator of how the housing market in the area has tightened.
In 2012-13, the average time a home spent on the market was 144.9 days. It’s now 73.6 days.
The tight market is due to several factors, said First Weber real estate agent Doug Larson, including consumer confidence, return of the first-time home buyers and low inventory.
Larson said many younger people who were renting or living with family are now jumping into home ownership.
“Many thought that the millennials would stay renters forever, but we are seeing them opting for the American dream like generations past, just a little later in life, which is consistent with the millennial pattern for getting married and starting families later in life,” Larson said. “So with the improving economy and pent-up demand from the Great Recession, it has created kind of a perfect storm in real estate.”
Why the lower inventory? It’s primarily because new construction still has not caught up to its pre-recessionary level, said Century 21 real estate agent Vickie Kelsall.
Kelsall said inventory is extremely tight in the under $300,000 range, but as you go up the price ladder, availability increases slightly.
“Many potential sellers are worried about selling their home and not being able to find a replacement due to the low inventory,” Kelsall said. “Most need to sell their existing home to buy their next home and if you have a home sale contingency your offer will more than likely not get accepted if other offers are submitted without a sale contingency.”
One buyer’s experience
One of Kelsall’s clients, David Birren of Stoughton, knows all about the tight market.
The 68-year-old retired state Department of Natural Resources business consultant recently purchased a home in Wauwatosa – but it took some doing.
Birren, who said he’s purchased six or seven homes in his life, called the experience “crazy,” saying he had one stretch in March where several homes in a row were snatched up before he could pounce.
“I had about half a dozen situations where a house was sold right out from under me,” Birren said. “I mean a house was on the market one or two days.”
It ended well for Birren, who purchased a two-story bungalow with a 2 1/2-car garage for $230,000, his predetermined budget, and just $100 over the asking price.
It, too, was only on the market a couple of days. Birren visited the house the day after it listed and wrote an offer on the spot.
“I learned that there was a second offer that same day,” Birren said. “So I was lucky enough to nail it and there wasn’t somebody in the pipeline already before it went on the market.”
Birren also got to experience the other side of things, selling his 1,000-square-foot, one-bedroom home in Stoughton within a week of it going up for sale, a pleasant surprise.
When he bought it eight years ago, Birren said his real estate agent cautioned him about buying a one-bedroom house, saying they’re typically tough to sell, but it turned out to be a non-issue.
“Two couples came to look at it and the second one didn’t hesitate with an offer,” he said.
Another measuring stick we used was the change in the number of homes sold. All but seven communities saw an increase.
In terms of a percentage jump, no community moved the needle more than Lannon, which went from six sales five years ago to 17 in the past year, a jump of 183 percent.
Big Bend, Genesee, Chenequa and Greendale follow, with Brown Deer, St. Francis, Cudahy, Wales and Dousman rounding out the top 10 in that category.
Larson said much of the increase in Lannon is related to the Whispering Ridge subdivision, which in 2013 was a condo-only development.
“The development was lagging and was sold to a different developer who opened it up to single-family homes,” Larson said.
In 2018, there were five sales in Whispering Ridge averaging $384,800 versus none in 2013, he said.
Home inspectors hopping
Buyers, sellers and real estate agents aren’t the only ones affected by the market surge.
Home inspectors have been keeping busy, too.
Jay Paulson is a home inspector at MKE Home Inspection and president of the Milwaukee Chapter of the Wisconsin Association of Home Inspectors.
Paulson said the number of home inspections is directly proportional to the number of home sales.
“I would say 90 percent of home sale transactions have a home inspection, it’s just become an integral part of a home sale,” Paulson said. “So if you look at the increased market, the amount of home inspections go right with it.”
Paulson estimated 50 to 60 percent of his clients are first-time homebuyers and said he uses the inspection process as an education tool. And he’s had to do some educating.
“Believe it or not, millennials, sometimes they don’t even know what a furnace is and what it’s for,” Paulson said.
Home prices up
Not surprisingly, the price of homes in the suburbs has also increased, with an average jump of 24 percent over the past five years; 49 of the 52 communities registered increases.
Leading the way is West Milwaukee, which has seen its average sale price surge from $72,633 to $134,102, an 85 percent jump.
Oconomowoc Lake, Lannon, St. Francis and Port Washington are also in the top five, with Brown Deer, Elm Grove, West Allis, Greenfield and Thiensville completing the top 10.
Big money homes
The 2017-18 sales include some big-ticket homes, such as a 10,000-square-foot residence on Pine Lake in Chenequa that sold for $3.9 million, a home on a private peninsula on Genesee Lake Road in Summit that changed hands for $3 million and a house on Parkside Place in Merton – complete with a billiard room, basketball court, pool and a pond – that went for $2.4 million.
Also changing hands was the Knollward mansion in Oconomowoc, which sold for $2.75 million.
How we ranked them
Information was obtained from the Multiple Listing Service for communities in the Now News Group coverage area, which includes all of Waukesha County, the non-Milwaukee part of Milwaukee County, and parts of Ozaukee and Washington counties.
Listings were for single-family homes only.
Communities comprised of more than one type of municipality were combined for purposes of the comparison. For example, “Pewaukee” contains data from both the village and city of Pewaukee.
One-year chunks of time were used to make the comparisons. Current values represent the time period from May 29, 2017, to May 29, 2018. The data from five years ago is from May 29, 2012, to May 29, 2013.
This article provided by NewsEdge.