You might believe that there are not enough home buyers in Greater Milwaukee, but data suggests that is not true.
While the media touts higher mortgage rates scaring buyers and affordability issues, the pent up demand is also real. The homebuyer pool is changed nationally and in Milwaukee.
Today, a home in Greater Milwaukee attracts from a similar pool as before, tapping first-time buyers, families upsizing or people downsizing, while others relocate to Greater Milwaukee which saw a slight population uptick for the first time in decades.
Local Buyers Are Still Active
Many buyers throughout Greater Milwaukee have simply been waiting. Higher rates slowed some decisions, but they didn’t eliminate the need to move.
People still get married. Families still grow. Jobs still change. Parents move closer to children. Divorces happen. Retirement happens.
Life keeps moving even when mortgage rates rise.
Over the past couple of years, we’ve seen many buyers hit pause rather than cancel their plans altogether. As rates have stabilized and inventory has improved, some of those households are returning to the market.
We have been talking to buyers who left the market temporarily and spent the past year saving for a larger down payment. Others waited for more inventory to become available. Many simply wanted more certainty before making a major decision.
What we are seeing as an agency is a slow trickle of buyers continually coming to market as they see homes that they like and are in their price range.
We can also say that we are hearing from people who unwilling to pay prices they feel are too high. There is a developing balance in the home real estate market that we have been discussing in other articles this year.
We think that people waiting to sell in anticipation of higher home prices might be disappointed. As we mentioned a few months ago, if you are planning to sell, sooner might be better than later financially.
Change Buyers In Today’s Home Market
One of the largest groups of buyers is the change buyer. These are homeowners who already own a house but need something different.
Some need another bedroom, some want more land. Others are in family formation and looking to switch school districts. We see these situations all the time.
Change buyers usually create a chain reaction. One transaction creates more. This is similar to the “velocity of money.” That is, when one person spends, the person receiving that money spends some of it too, and so on down the line.
They sell one house and buy another. The buyer of their home may be a first-time buyer. The seller of the next house may become a downsizer.
This matters because sellers sometimes assume only first-time buyers are shopping. In reality, many active buyers already own homes and are simply looking for the next one.
We see buyers who have been watching specific neighborhoods for months because they know exactly where they want to live. This is a mark to a motivated and patient buyer. We have been helping a host of them over time.
Downsizers Are Entering The Market
One of the fastest growing groups is downsizers. As discussed by recent studies from Zillow and Berkshire Hathaway, we are at the front end of Baby Boomers downsizing. Their move is often from a multistory home to a ranch.
Many of these folks bought larger homes twenty or thirty years ago when they were raising families, and often, didn’t mind walking up and down stairs. Today, many Boomers are slightly downsizing to ranches, often closer to relatives, and putting a few dollars of equity in their pockets. We see this throughout the area.
Most of those downsizing are also buyers. A handful move away from Milwaukee, but they are offset by younger buyers and a growing number of relocations. Common goals of downsizers are to find:
- Single-level living
- Smaller yards
- Lower maintenance
- Walkable neighborhoods
- Condominiums or attached homes
This has led us facilitate what is becoming a major shift in the market. In essence, people are swapping properties that fit their lifestyle and place in life. They want the next chapter of their life to fit as well as the last one – or better.
Relocation Buyers Continue To Discover Wisconsin
Perhaps the most overlooked buyer today is the relocation buyer.
Greater Milwaukee continues to attract people moving from higher-cost areas. Some come for jobs. Others come for family. Some arrive because Wisconsin offers a different pace and a lower cost of living. A growing group are those who are retired and moving back closer to family.
The three biggest areas Milwaukee is getting relocations from are Chicago, Minneapolis and California. Interestingly, for now, those three markets all have generally higher real estate prices than Greater Milwaukee. That has led us to see quite a few cash offers from out of state, or at least very good financing for their offers.
That doesn’t mean every out-of-state buyer arrives with unlimited cash. They just have reasons to move here and, for now, they many are moving from areas where there is an arbitrage opportunity for them, that is, they can sell for higher than they buy here.
In comparing housing costs, commute times, schools, and quality of life, Greater Milwaukee often is attractive to people from higher cost areas. People relocating to eastern Waukesha County, where we do a lot of business, often cite the space and amenities at prices that may feel much more reasonable than other metropolitan markets.
We’ve also seen buyers arrive with very little knowledge of southeastern Wisconsin only to discover that several communities fit what they’re looking for. For sellers, this matters because relocation buyers often approach the market differently. They often rely heavily on online listings and video tours. By adding our personal touch and expertise, we have helped both sides of the home buying and selling equation.
Your Buyer May Not Be Your Neighbor
One mistake we see sellers make is assuming their likely buyer looks exactly like them.
A retired couple may assume another retired couple will buy the house.
A family may assume another family will move in.
Sometimes that’s true.
Often it isn’t.
The buyer may be relocating from another state. The buyer may be moving up from a smaller home. The buyer may be downsizing from a larger home. The buyer may be purchasing their first home after years of renting.
Good marketing reaches all of them.
That’s why pricing, preparation, photography, and exposure matter so much.
A home that is properly prepared and marketed allows different types of buyers to picture themselves living there. The more people who can see themselves in the home, the larger the effective buyer pool becomes.
The Bottom Line
If you’re thinking about selling in Greater Milwaukee, don’t assume there aren’t enough buyers and put off selling. We are seeing a patient buyers market that has a lot of pent up demand. There isn’t much upside left to holding a home off the market from what the data is telling us.
In short, the home buyer market has changed to be more patient and more demanding in the past several months is our experience. The demand for homes is still there, but it is a discerning group of buyers who aren’t as willing to engage in bidding wars.
Either way, the pool of buyers is probably larger than you think.
If you’re curious who the most likely buyer for your home might be, we’d be happy to talk through it with you. Sometimes understanding the buyer pool is the first step toward deciding whether selling makes sense at all.
If you are a home buyer, your goal is to find a few acceptable options and decide which makes the most sense for you. If we are correct, and we’ve been pretty close so far, more homes are going to become available in coming quarters. If you are willing to do a little work on a home, or be in a multistory home, you might find a better deal than only looking for move-in today ready.
If you are a home seller, your goal isn’t to find one buyer. Your goal is to allow the entire buyer pool, seen or unseen, to compete for your home. You will want to fix up your home the best you can to get the best price, because the bidding wars appear to be ending.
Contact us below to discuss your home buying or selling situation, and how we can help you find the best outcomes.