We may have passed the Real Estate bottom here in Milwaukee and Menomonee Falls, Wisconsin. I am seeing agents receive multiple offers once again. I am also seeing a high number of accepted offers on the searches I am conducting. I just searched for a 3 bedroom bungalow. A few weeks ago I was sending out some real great looking homes at low, low prices. Today they are all sold or have accepted offers.
A month ago I could find 50 or more homes based on the needs of any buyer. The searches I am going now turn up a dozen or so homes.
Last month I could find a number of foreclosed properties in good condition between $40,000 to $50,000. Today the prices have shot up into the mid to upper 60's.
Open houses are bringing buyers.
The last few offers I wrote were on properties receiving multiple offers.
I am seeing an increased number of buyers calling.
The number of sales on MLS has not increased but has been holding steady. Is this the beginning of a turn around or a temporary spike in sales?
I joined the Rotary Club of Menomonee Falls, Wisconsin on June 10, 2009. This is a nonprofit organization of volunteers involved in a number of local and world wide projects. In the past they have raised and donated money to a number of local causes including parks, scholarship funds, food pantry, library and youth development. For more information you can visit the site at:
http://www.menomoneefallsrotary.org/Community_Projects.html
The Menomonee Falls Rotary meets at noon on Wednesdays at North Hills Country Club N73 W13430 Appleton Avenue. It's great to see people take time from their busy schedules to help others.
Remember 2005, when real estate sales were peaking? Here is a comparison of all MLS sales for the Southeastern Wisconsin MLS.
April of 2009 1407
April of 2005 3642
Sales are at 38.6% of what they were just a few years ago.
We need a stimulus package that works. If the banks are offering to pay back a portion of the loans they received, the government needs to seriously consider investing that money in other areas. My suggestion is, make the $8000 tax credit available to all home buyers regardless of income or purchase price. Face the facts. A person buying a million dollar home may not need the credit (and they may need the credit) but the $8000 credit will not even come close to paying the property taxes. Why consider penalizing tax payers already paying a bulk of the taxes?
Write your representatives and let them know the plan they have now is not working and we need help sooner than later.
With the $8000 first time home buyer tax credit it seems many agents have forgotten the other incentives for buying a home.
The $8000 first time home buyer tax credit is only the beginning. What about the tax advantages saved every year? Paying a $100,000 mortgage may cost you $600 a month but remember, the interest and taxes are deductible. That may amount to $10,000 in deductions. If you are in the 15% tax bracket, this can put $1500 a year back in your pocket.
Hopefully we are pretty much hitting the bottom of the price declines in this recession. If we are at the bottom of pricing that could mean we may see an increase in home prices over the coming years. Lets imagine a 10 year scenario. Even if your investment looses money over the next two years you may be further ahead.
Year 1 loose 2% new market value $98,000.
Year 2 loose 2% new market value $96,000.
Year 3 no change market values $96,000
Year 4 increase 2% new market value $98,000
Year 5 increase 1% new market value $99,000
Year 6 increase 2% new market value $101,000
Year 7 increase 2.5% new market value $103,500
Year 8 increase 2.5% new market value $106,000
Year 9 increase 2.5% new market value $108,500
Year 10 increase 2.5% new market value $111,500
Even with modest gains you may show an increase in market value of over $10,000. Remember first time home buyers are also gaining an $8000 tax credit and receiving $1500 a year in tax refunds. This is a total of $33,000 in 10 years. If you looked at that in terms of an investment, you may show a total gain of 33%.
Of course this is theoretical, actual gains may be more or less.
Other incentives include:
Pride of ownership.
Access to home equity.
Freedom of expression.
Stability
Try and find a land lord that can offer you any of these.
This chart shows the sales figures as gatherd by the Greater Milwaukee and Southeastern Wisconsin MLS.
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