Normally among the hottest times of the year to buy or sell a house, July came up tepid in metropolitan Milwaukee.
The reason: Not enough homes on the market.
"The decrease in sales is not due to any weakness in the market. Rather, there simply aren't enough homes for sale to meet demand," Mike Ruzicka, president of Greater Milwaukee Association of Realtors, said Friday.
It's a national issue as well as a local one.
The number of houses available to buy is at a 20-year low as the appeal of McMansions wanes and baby boomers grow increasingly reluctant to trade up or down from their current homes, according to a survey by Realtor.com.
More than half of the survey respondents, 59%, said they aren't planning to sell in the next year.
Ruzicka said that while the four-county area is teeming with people who want to buy a house or condo, not enough homeowners are selling them.
"The brokers I've talked to who have been around since the '80s, they say, 'I never remember anything quite like this,'" Ruzicka said.
"In the early 2000s there was a lot of bidding going on, but in that market if you lost a bid on one house you could go to another one right away and start bidding and you'd eventually get one. Now, if you bid on one and you don't get it, you start the search all over again."
The short supply of homes for sale was reflected in July home sales in the four-county Milwaukee region. The number of sales that closed on existing homes decreased 5.2% from July of last year, a report from the Greater Milwaukee Association of Realtors shows.
Sales fell in all four counties: Milwaukee County sales were down 5.2%; Ozaukee, 6.3%; Washington, 14.8%; and Waukesha, 1.6%.
Through the first seven months of 2017, sales of existing homes still were running about 1% ahead of the same period in 2016.
Nationally, there was a 4.3-month supply of homes on the market in June — that's the time it would take to run out of homes for sale if no new units were added — down from 4.6 months a year ago, according to the National Association of Realtors.
A normal inventory would last six months.
In the four-county Milwaukee area, the seasonally adjusted inventory level for July was 4.8 months, a drop from 5.8 months in July 2016.
Shorewest Realtor Beth Jaworski said houses priced right for their condition and location in metro Milwaukee are quickly drawing action amid the scarcity of properties for sale.
"As soon as you put up a listing, within 24 to 48 hours you should have at least one offer. A lot of times you have three to six," she said.
The crunch has driven up home prices. The S&P CoreLogic Case-Shiller national home price index was up 5.6% in May from a year earlier, hitting an all-time high. Some markets are even frothier, with average prices up 13.3% in Seattle and 7.9% in Dallas.
"The housing shortage forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door," said Danielle Hale, chief economist for Realtor.com.
"Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home."
Realtor.com, an online real estate listing site operated by News Corp., conducted the survey of 1,054 randomly selected homeowners across the U.S. between July 6 and 13. Some findings:
Baby boomers aren't moving: A vast majority of those who are at or near retirement age like where they are. Eighty-five percent of baby boomers said they have no plans to sell their home in the next year, the study said.
Home ownership among baby boomers is at 78%, or about 33 million properties. That's nearly twice as high as millennials. Older age groups have historically moved less frequently than younger home buyers, and the trend continues.
But the market dynamics have shifted because there are more people in the older age groups than in past years. People age 55-74 made up 21% of the population in 2015, compared with 16% in 1985.
Happy with their homes: When those who are reluctant to sell were asked why they plan to remain, 72% said their current home meets their family's needs. Thirteen percent cited financial security concerns, and 12% noted the need to make some home improvements.
The Greater Milwaukee Association Realtors conducted its own survey in May and found some were holding off on listing because of concerns about potential policy changes in Washington, D.C., on things like the mortgage interest deduction, taxes and health care. Others had recently remodeled their home, and some were holding out for higher prices.
