Last year ended on a positive note for Milwaukee’s real estate sector. The Greater Milwaukee Association of Realtors reported the area had its strongest December for home sales since 2004. It was the eleventh straight month home sales increased here.
At the same time, the latest numbers show some cautionary signs – especially for people trying to afford their first home. Lawrence Yun is the chief economist for the National Association of Realtors, and he adds some context to the discussion.
"The supply of inventory homes available for sale are falling, falling, and falling. So this trend could continue, which means that prices could rise too significantly which would then hit affordability and hold back first time buyers," Yun explains.
Ten years ago the housing bubble burst due to loose underwriting standards combined with overbuilding to make a terrible mix, says Yun. However, he explains, today we still have not quite evened out in the housing climate because of more stringent underwriting standards and a shortage of construction.
"There needs to be an additional fifty percent increase in housing starts just to get us back to normal," says Yun. "We don't want oversupply - we have undersupply and because of housing shortages, the rents and home values are rising too fast."
Overall, no matter how many houses get built, Yun explains that people will always wait on making such a large purchase, like buying a home. In order for people to take that next step, there needs to be better mortgage and credit accessibility, and local housing inventory.