2022 housing market will continue pandemic market trends, benefitting sellers
For the sixth month in a row, the Metropolitan Milwaukee real estate market outperformed the pandemic fueled market of 2020, according to a recent Greater Milwaukee Association of Realtors (GMAR) report.
So far in 2021 there have been over fifteen thousand sales. If trends continue, it looks like 2022 will continue to be a seller’s market.
"When the pandemic hit ... we were thinking we were heading into a recession," says GMAR president Mike Ruzicka. "And then Governor Evers actually declared real estate to be an essential service, and that kind of opened the floodgates. From that time on, the market has just been crazy."
This historically tight housing market has a number of factors contributing to the mounting sales of homes, but GMAR chairwoman Courtney Stefaniak says that the low inventory levels in the past two years has been one of the biggest drivers.
"I don't like to call it a 'bubble,' because if there was more inventory, if more people would sell, the market could definitely absorb that. We kind of almost need that inventory," she notes.
Ruzicka notes that while the housing market after the recession was a value for discounted properties, it has shifted back to a more traditional one starting around 2015. While the summer market from April to June is peak selling time with above average pricing, the average price increases have gone up at the same rate every year according to Ruzicka.
"Even within a year they get kind of cyclical and they're about where they should be," he notes.
The Metropolitan Milwaukee real estate market out performed Waukesha, Washington, and Ozaukee counties — who all saw a decline in sales.
The pandemic has attributed to homeowners having more equity in their home and lenders have been stricter with their lending practices for buyers.
"Because of the pandemic causing everyone to work from home, kind of stay at home more, or not travel as much. People really kind of invested in their house and I think that’s one of the reasons why prices all over the market increased," says Ruzicka.
Stefaniak says part of the challenge she currently faces in the field is having home owners who are willing to sell, but aren't sure where they will go because inventory is so low.
"The need for inventory really comes in to the need for more affordable inventory, maybe that $350 [thousand] and under price range," she explains. "That's kind of where we're seeing a lot of that activity and a lot of the aggressive offers being made." This housing inventory is often what first time millennial home buyers or older homeowners looking to downsize are competing for.
Both Ruzicka and Stefaniak agree that the greater Milwaukee area doesn't need new rental properties, despite the rise in more luxury apartments. "Right now we're seeing a ton of rental development, but no condo or single family development," says Ruzicka. "Because there isn't enough construction on the condo and single family side, [people are] forced to stay in apartments a little bit longer probably than they expected to. So we need to find a way to break that log jam somehow."
2022 will still be a strong seller's market, even if there will be an uptick in listings according to Stefaniak. She recommends going through the proper steps to ready your home for a sale if you're selling, and make sure to go through the pre-approval process if you are looking to buy a home in the near future. One of the best tools for a buyer is understanding how you can best write a competitive offer, Stefaniak says. "Be creative, adjust your offer to the seller's needs as best you can so that you can compete if you need to."
"The spring of 2021 was record-breaking," adds Rusicka. "I don't know if we're going to get back there. I hope we don't because it really soured a lot of buyer's attitudes towards purchasing."