Housing Market Sentiment

[Miguel Vazquez]

I would love to hear an update on everyone's sentiment on the current housing market. In the last few weeks it seems as though the media is turning away from being bullish. The cost of material is up quite a bit from even the start of the pandemic, SFR prices are starting to cool off, and real estate industry sectors are bottlenecked to the brim. From a lender's perspective, CIVIC FS, the lender I work with, is seeing a tremendous influx in business. With increases in conventional interest rates, investors are shifting to more creative forms of lending like interest only DSCR loans and we are picking up a lot of the slack. How are you adapting to the constantly changing market? Where do you see home prices going in the next quarter? Next year? I wish everyone the best of luck!

[Marcus Auerbach]

For me in Milwaukee the recent cooling off is a very welcome change towards a healthier market. I have not bought a rental property since January. We have seen inventory go up 16% in June, which is less than the 19.6% national average. The western and southern states have seen the highest increases in inventory, which is a reaction to the insane pace of price appreciation from an already high level - higher rates amplify the issue and create serious affordability issues in those expensive markets!

September and October will likely be the two single best months to buy this year, more inventory and fewer buyers. We will see what happens with rates, a lot of mortgage experts point out that rates usually fall during recession. And we are edging along, even if Q2 will turn out to be positive GDP. And what a strange recession - normally lay offs and higher unemployed rates are the hallmark and here we are with 11 million job openings and 5 million unemployed, totally upside down.

Long term I am bullish for our market. We are rustbelt no more, a climate haven with plenty fresh water and no other major natural disasters like hurricanes or earthquakes and relatively low cost of living. We don't see a lot of people moving here (yet), because word is not out how Milwaukee has changed in the last 10 years, but it is more every year. We lack new construction, the housing shortage will continue and prices are bound to go up, probably double in the next 10 years.