Brian and David Wickert discuss this week’s top mortgage and realty news, and dig into factors influencing the housing market, both statewide and nationwide.
This week on the Accunet Radio Show:
Brian and David shed insight on a recent Wall Street Journal article claiming a nationwide buyer’s market, explain the transition from home seller to home buyer, and give you updates on breaking news and county-specific issues. Plus, an exciting update on a homebuyer using commission-based income to purchase his first house!
This week’s highlights
- The vast majority of SE Wisconsin is still a seller’s market — unless you’re looking to spend more than $500,000.
- Condo sales are down 23%, and single-family home sales are down 19% in the 5-county Milwaukee metro area.
- Wages have grown 3.2% in the past year, with housing prices in SE Wisconsin growing by 7.5%. How do you make up the difference? Getting a bridge loan could be the answer.
Are we in a buyer’s market?
On April 1, the Wall Street Journal published “A Buyer’s Market? Hopes Rise With Falling Rates, More Homes for Sale“ by Laura Kusisto, which claims America as a whole has entered a buyer’s market. Is that true for Southeastern Wisconsin? Not quite.
All real estate is local. The market changes street-by-street.
This article is skewed toward major metro areas, and, while cities like Seattle might be experiencing a buyer’s market, the same can’t be said for the Milwaukee metro area.
- Single-family home listings in March 2019 are down 19% year-over-year
- 1,162 homes exchanged hands in March 2019 — 277 fewer than last year
- The only way SE Wisconsin can be considered a buyer’s market is if you’re looking for a $500,000+ house, which, needless to say, most people definitely aren’t.
Why are SE Wisconsin home listings down in 2019?
At Accunet Mortgage, we issued the same amount of pre-approvals in March 2019 as we did in March 2018. People are looking to buy — so why are listings down? Well, there are a couple of theories:
Theory 1: Bad weather. When you buy a house, negotiations usually take place the month before you buy. Negotiations for homes purchased in March began in February — in the middle of a polar vortex. It might seem counter-intuitive to delay a future home purchase because of weather, but trying to move in the freezing cold is a very real deterrent for Wisconsin homebuyers.
Theory 2: Tight logistics. Most sellers are also buyers; They’re looking for a new home to replace the one on the market. A caller on the show theorized that, because the seller’s market in WI is so intense, sellers are afraid to list their homes because they think they won’t be able to find a new one quick enough. In other words, they’re worried about timing — totally understandable.
Bridge loans = A tool that helps existing homeowners buy their next home before they sell their current home.
Client update: Buying a home on commission-based income
Over the past couple weeks, we’ve been keeping you up-to-date on Eric, the 25-year-old salesman who makes half his money from commission. (Click here for a brief summary.) Here’s the latest:
He recently went to an open house for a beautiful $295,000 home. And, in true seller’s market fashion, it was absolutely swarming with potential buyers. So, Eric called me and said, “Brian, what do you think I should offer? $10,000 over asking? $12,000?”
In these situations, the best thing to do is have a conference call with us (the mortgage lender), the buyer and the real estate agent. Why? Well, 5-digit numbers can sound like a lot up-front — but at Accunet, we help quantify exactly what those numbers mean. The difference between offering $10,000 and $12,000 over asking is only $10 a month. Once we explained this to him, the offer was placed lickity-split — and they got the house!