I was at an Economic summit sponsored by Northshore Bank and GMAR this morning. They had 3 professors, one from Whitewater and two from Marquette as well as Northshore Bank reps and GMAR reps with reports for 2013 and upcoming 2014. All experts in their field on Real Estate from lenders, Foreclosures to valuation and predictions.
I thought some of this might be of interest to you.
Everyone is in agreement that interests will go up and loans will be more difficult. The bond rate has increased/will increase from 1.7 in June of 2013 to 2.8 in 2014, while the new Dodd-Frank lending regulations will make qualifying more difficult and time consuming. The bond rate is a big indicator that we will not see interest rates go back down. The question, how high and when. That will be based on other economic indicators such as unemployment and economy growth. What is going to happen or the effect the ACA will have on the consumer is still a big question. Homes sales increased a total of 10% over all in the 4 county area from 2012 to 2013 with an over all price increase of 7.2%. Foreclosures in our 4 county area were down 30% for 2012 to 2013 are expected to continue over all but some big Banks may see some increases.
They showed stats that the increase in apartment rentals have been strong and growing over the last 5-7 years, but have seen them taper off and expect them stay constant in 2014 and forward. They also said the rental amounts/rates should stay the same and will not increase. Some of the reason for rental market increased and now tapering off are, renters that could not qualify for purchases from leaving there homes can now purchase as well as Y generation buyers waiting 7-5 years for the market to improve, that have now become active buyers in the market. This will change the rental market. Other indication in Milwaukee are growth downtown or area job growth, these will also have an effect on the rental market. They did stress 2 areas of strong growth are new construction home and condos. New homes are up 30-40%, while the demand for condos are up with both Baby boomers and Y generation buyers with very little inventory.
Bottom line, while many indicators look good, it is too early to tell what 2014 will be like for the Milwaukee Real Estate market. They do predict sales increasing, inventory staying low, interest rates going up and lending becoming more difficult. What is going to happen with the economy is still in questions and what effect ACA will have with the consumer have insurance prices staying the same or going up and how much and how it will effect there monthly expenses/costs indirectly effect the amount of the debt to income ratio. . They did agree that this will effect first time home buyers less than trade up buyers. They still said it is a good time to purchase and all agreed the sooner the better.
As always please feel free to comment or get a hold of me with any questions.