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2017 Real Estate Market the Year of the What

This has got to be the strangest Real Estate Market I’ve seen in my 15 years of experience. Early reports emphasized a low number of listings in the first and second quarter of the year. Listings were way down. That shifts Real Estate Agents and Brokers into the mode of seeking more listings. When the word on the streets is, there is a shortage of listings, Sellers are told, and led to think they are in a Seller’s market. Of course in a Seller’s market, prices go up, Buyers make quick decisions, and the inventory of houses for sale shrinks, causing another round of higher prices. It is like creating a monster.

The latest statistics tell a different story. The following is from the local Milwaukee MLS (Multiple Listing Service).

“New Listings in the Milwaukee region increased 4.0 percent to 2,384. Pending

Sales were down 52.1 percent to 860. Inventory levels fell 4.0 percent to 6,038

units.

Those low sales numbers tell us, this is a Buyer’s market. But wait, other sites report a totally different picture. The following information is from the WRA, Wisconsin Realtors Association.

Despite low inventories of houses on the market, both home sales and median prices finished the summer ahead of last year, according to the most recent analysis of the existing housing market by the Wisconsin REALTORS® Association (WRA). Home sales in August set a record, running slightly ahead of sales last August by 0.6 percent, making it the strongest August for home sales since the WRA recalibrated its data collection methods in 2005. Year-to-date sales are also at their highest level, with 55,588 homes sold between January and August this year. Tight inventories have put strong upward pressure on the median price, which rose 7.1 percent above the August 2016 level to $182,000. This pattern has persisted throughout the year, with prices up 6.1 percent since January as compared to the first eight months of 2016.

Based on those two stories, we have a tale of two completely different markets. The thing is, one story tells the Real Estate business, we are in a Seller’s market. That is why prices have been going up. The other story tells us, there is a lack of Buyers in the market, and Buyers are in control, so prices should be dropping.

One report covers the entire state of Wisconsin. The other report covers the Milwaukee and surrounding counties. Can there be that much of a difference? There appears to be. Or reports have been created to drive the market in a particular direction. Which one is it?

We are supposed to be getting reports based in public information. Of course all that information is gathered on computers, people take a look at the statistics, then write reports. Sometimes vital information is omitted. That can create a problem. You have to compare all sides of the issue before actually seeing what the market is doing.

Another issue I see is, I’ve seen prices in one area go up while prices a few blocks away are stable, or dropping. That’s the trick I use. Draw a half mile radius around the subject property and look at what has been happening over the last 3-4 months. That is information every seller and buyer should have before negotiating. That is information every Real Estate Agent should be sharing with every client.

It seems people can get caught up with information, statistics, reports, and other stuff to such a degree, they forget how to roll up their sleeves and do their job. The Internet can be a good thing, but when you allow the information highway to drive your business, you are not on cruise control, but under control. That is never a good thing.

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