APPLETON (NBC 26) —
- Home affordability in Wisconsin has reached an all-time low, according to the latest report from the Wisconsin Realtors Association
- New homeowners Zach and Danny Munger searched the Appleton housing market for years before finding their perfect home
- Home sales in Wisconsin have surged by 11% since last year
- Realtors Association of Northeast Wisconsin weights in on possible causes and solutions
If you're shopping for a new home right now, you already know that home affordability in Wisconsin has reached an all-time low. That's according to the latest report from the Wisconsin Realtors Association.
NBC 26 talked to experts and new homeowners about the state of the market and how long this may last.
New Homeowners Zach and Danny Munger searched the Appleton housing market for years before they recently found the perfect home for their family. "It was a tough experience for a couple of years," said Zach. "You really had to make some sacrifices on what you wanted."
His wife, Danny remembers the challenges they faced: "A lot of conversations were about whether this house was really worth the number. So yeah, definitely discouraging."
According to the Wisconsin Realtors Association, home sales in Wisconsin have surged by 11% since last year.
The report also shows interest rates rose from 6.43% to 7.06%. The combination creates a tough buyers market in the middle of peak selling season.
Local Broker, Stacey Hennessey of Stacey Hennessey & Co, noted that sellers are also experiencing sticker shock. "This morning I went on a listing appointment and I always love to ask before I give my two cents, 'What do you think your house is worth in today's market?' And he's like, 'I hope it's worth 500,000.' And I'm like, 'This is gonna be a great day because you're at about 600,000 at least.'"
Hennessey adds the market inventory is low. “We have about 97 houses available under 400 and then about 175 over 400 And that might seem like a lot but that's everybody who's coming into town looking for a house.”
Jennifer Sundstrom with the Realtors Association of Northeast Wisconsin says that the lack of supply and significant demand is a perfect storm for surging prices. "We've been building this problem for 10 years, and there are only so many things that we are going to be able to affect in the near future."
According to Sundstrom, several factors are contributing to the market conditions:
- Builders not keeping up with demand since the last recession
- New millennial home buyers entering the market
- Baby boomers looking to downsize
- Lack of land available for development
Sundstrom suggests that developing more land for residential homes could be one solution.
“Probably one of the only things that we're really going to be able to have any effect on or move the needle on in the near future, and that is everything that contributes to housing or a lack of housing at the local level,” she says.
“Large single-family detached homes is not going to dig us out of this problem very quickly. So we need a lot more housing options for all the various price points of individuals that are out there. townhomes condominiums duplexes, are we need a lot more inventory being created in in those types of housing units and price points.”
Lowering interest rates might not be the answer. In fact, it could exacerbate the problem. If interest rates drop, more people will be looking to buy, driving up demand even further.
Read the full report HERE.
