Wow, what a first quarter! If anyone would have told me the first quarter of 2022 would be hotter than the first quarter of 2021, I would not have believed them. As of today March 30th, 2022 we continue to break sales records over and above 2021.
The first quarter of 2022 marks the strongest recorded seller’s market in Milwaukee’s history. Milwaukee, Wisconsin, and the surrounding counties are seeing little to no inventory at all price points, and as a result, prices for homes have skyrocketed over the last three months as the scarcity of homes has increased and demand is outstripping supply.
So why is this happening? It is not just one thing that is causing a scarcity in housing, it is many things. The baby boomers are living longer and not moving out of their homes and now the boomer’s children, the millennials, are in the market to buy their first home creating dwindling housing supply, high demand and rising prices. Housing starts have not kept pace with a rise in the population and now the cost of goods and labor are on the rise. Popular locations like Milwaukee’s North Shore and Wisconsin in general are seeing heavy relocation to our area as one of the last and most affordable mid-sized cities in America.
Just in a few months’ time, we have seen a big rise in the average North Shore home’s selling price and bidding wars that have led to 103% sale to list price. We are now seeing the price per square foot in the North Shore anywhere now from $271 to even $493 a square foot OFF Lake Michigan. That is an increase of 7% over December and days on market are in the single digits. I am now forecasting similar market results to continue through 2022 outstripping the typical market seasonality from January through May. This year’s market is different. The fast break neck pace may continue all year long as buyers scramble to take advantage of still historically low interest rates.
Mequon and Ozaukee County are experiencing the same conditions with soaring prices and low inventory. For luxury homes over $700,000 the price per square foot is now average $238 or greater a square foot and a 98% sale to list price ratio with an average of less than 51 days on market, which is a new record for Mequon luxury homes. Historically, 2022 is turning out to be Mequon’s best residential real estate market ever recorded. Ozaukee County in general is breaking records in every community. Port Washington condo developments are sold out before they are completed, and we are reaching new historical high prices in every community we serve. Please note that inventory rates in Mequon, Whitefish Bay, Shorewood, Bayside and Fox Point have dropped aggressively through the first quarter, and in some communities, there is no inventory.
As of this writing, the 30 Year fixed interest rate is at 4.75% and climbing. Jumbo loan rates are actually lower than a conventional loan at 4.53% helping to fuel sales above $647,200 the jumbo loan limit in the State of Wisconsin. The Federal Reserve is calling for 5 more rate hikes throughout 2022 so buying now and locking in your rate can be a key factor in affordability.
The market is very fluid and uncertain. Supply chain issues, worker shortages, environmental concerns and migration from bigger cities continues to impact our housing here in Milwaukee. Wisconsin is a new favorite destination for a nation who can live anywhere and is very popular in the land of “I can live anywhere and work remotely” and that means increased sale prices for your real estate, the likes of which we have never experienced before.
Do you have questions about the market? I am happy to meet with you. I am here to support your selling efforts. I am supplying my clients with Market Analysis Reports on a regular basis to keep them well informed during this time. You are welcome to call me, (414-870-7175), and I am happy to supply you with a market analysis for your home. Prices have adjusted upwards in the last 3 months, and we are up 10% over the fall of 2021. I have no idea how long this will last. Inflation is impacting buyer’s monthly cost of living, which should mean an impact in housing prices, but we still are running years of deficit in housing supply.
All My Best,
Suzanne Powers
