Almost 80% of the metro Milwaukee area's most-active real estate markets saw an increase in the average home price in 2014, and real estate analysts expect the trend to continue this year.
Only 11 of 50 municipalities where at least 50 sales occurred last year had a drop in the average sale price, according to data from the Greater Milwaukee Association of Realtors.
An improving economy, a better employment picture and low mortgage rates get most of the credit for the better housing market, and those factors remain in place as 2015 begins.
Even in January, a month that typically has less activity because of Wisconsin's winter weather, interest remains high among people looking to buy a place of their own or to move to another house or condo, real estate professionals say.
"We've definitely seen strong activity since the new year. Lots of showings, lots of offers," Shorewest Realtor Beth Jaworski said last week. "Interest rates are crazy low right now at 3.625% for a 30-year fixed and 3% for a 15-year fixed, which is pretty much the lowest they've gone in the 22-plus years I've sold real estate. I think that's part of what's driving this."
Although total home sales were down 2.5% overall in 2014 from a year earlier in Milwaukee, Ozaukee, Washington and Waukesha counties, they picked up in the last quarter as interest rates started to fall.
"I'm surprised it is this busy right now," said Dave Schmidt of Dave Schmidt Realty in Milwaukee. "I do think, to be honest, not being such a brutal winter is helping us right now. With interest rates being down under 4%, I think you are going to see people out there buying."
The housing market has recovered slowly since it peaked here in 2007 and then joined a nationwide slide into a total buyer's market.
As the economy has progressed, so has the housing market, although it still hasn't caught up to prerecession values. Average prices in Milwaukee and Waukesha counties, for instance, are back roughly to where they were in 2008.
Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, said it finally feels as if the market is moving away from the post-recession malaise.
"Interest rates are good. Job creation is good. Consumer confidence is up. Unemployment is down. All the ingredients for a good market are there," Ruzicka said.
The market actually could use more sellers, he said, as a good mix of first-time buyers, homeowners who want to move up to a bigger house and older residents who want to downsize are out shopping.
Economist Brian Jacobsen said he expects to see "a bit above normal improvement in housing" this year.
"Interest rates are likely to stay low, but drift a little higher. That should keep financing costs low for those who can qualify for mortgages," said Jacobsen, who is chief portfolio strategist for Wells Fargo Funds Management in Menomonee Falls and a professor at Wisconsin Lutheran College.
For the past few years, "it may have looked like the only ones who qualified for loans were those who didn't need them, and that may be changing," Jacobsen said.
"Not only are banks reporting that they are easing lending standards, but the Federal Housing Finance Agency is helping by allowing borrowers to have lower down payments," Jacobsen said. "Easier credit conditions plus improved income growth is a formula for a slightly better real estate market."
Although sales price data from the Greater Milwaukee Association of Realtors tells only what the average was among properties sold in a year, it shows how things have turned around from the gloom of five years ago in the local housing market.
In 2009, only about a dozen municipalities in the four-county area saw an average price increase from the year before, while in 2014, that's about how many had an average price decrease.
Among the 50 most-active residential real estate markets in metropolitan Milwaukee, Slinger and Fox Point have the biggest one-year average sale price increases, at 19.2% and 17.6%, respectively.
The biggest decreases in average sale price were in Hartland, down 13.2%, and Thiensville, 10.5%.
Foreclosed properties, while still around, have waned and aren't the drag on average prices they were a few years ago.
The average number of days a property sat on the market for sale also declined last year.
©2015 the Milwaukee Journal Sentinel. Distributed by Tribune Content Agency
