MARKET REPORTS: JULY 2018
Housing price bubble chatter has increased this summer, as market observers attempt to predict the next residential real estate shift. It is too early to predict a change from higher prices and lower inventory, but the common markers that caused the last housing cool down are present. Wages are up but not at the same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices. At the same time, demand is still outpacing what is available for sale in many markets.
New Listings in the Milwaukee region decreased 2.4 percent to 2,285. Pending Sales were down 60.6 percent to 710. Inventory levels fell 1.8 percent to 5,035 units.
Prices continued to gain traction. The Median Sales Price increased 7.3 percent to $230,700. Days on Market was down 23.1 percent to 30 days. Buyers felt empowered as Months Supply of Inventory was up 9.7 percent to 3.4 months.
Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.