Real estate agents across the country have long told Milwaukeeites the market is overvalued, but the city’s luxury home real estate market is on the verge of a historic renaissance, as the region’s home prices climb again.
The Milwaukee market is among the fastest-growing markets in the nation, fueled by booming supply and a strong dollar, said David L. Hensley, chief executive of Realtor.com.
That surge is expected to continue as the housing market recovers and demand for luxury homes remains strong, he said.
Home prices in Milwaukee jumped nearly 40% in the past year, while total sales surged almost 80% to more than 9,000 units.
And sales are up by an average of more than 5% a year, according to a study from Knight Frank.
Home values in Milwaukee, where the median home price is $180,000, were up 23.3% in 2016 and up 27.6% in 2017.
The median sales price in Milwaukee in 2017 was $168,800, up 17.6%, according to Knight Frank data.
The region has seen a resurgence in the number of people moving into the city.
The number of new homes built in 2017 increased by nearly 80% from the previous year, and new listings increased by about 70%, according the National Association of Realty Investment Professionals.
Hensley said the city is becoming a major destination for investors seeking homes.
He said the number is expected in the $2 million to $3 million range, and the average price of a single-family home is currently hovering around $150,000.
He predicts the market will continue to grow, as demand continues to increase.
“It is the type of demand that has fueled the price increase over the past few years, which is what I think has driven prices,” he said, adding that there are “good reasons for optimism.”
There is also strong demand for new condos and townhouses, and Hensleys group is seeing an influx of developers and owners.
The city has one of the largest single-year housing construction projects in the country.
That includes the completion of the West Side Market in June and the addition of the Midtown Greenbelt project, which includes the former Keweenaw Mall site and two towers on the Westside.
In addition, the city also recently announced the opening of a second luxury housing development at the former Creswell site.
Hentsley said there is a lot of new development in the market, but he did not have a specific number.
He said the luxury housing market is important because it will help boost the local economy and create jobs, because people who want to move into Milwaukee will be able to do so, and that the city can also provide a base for development and economic development.
The market is growing rapidly, with more than 400 new luxury homes being built each month, according.
Hentsley noted that more than 100,000 new condos are being built in the city each year, with almost 70% of those coming from China.
The number of luxury homes in the Milwaukee market increased to about 2,500 units last year, a 36% increase from the year before.
The increase in luxury home sales has helped push the median price of single-home homes up by more than 20% a decade, according the Knight Frank report.
Hentley said he is excited to see how the market responds in the coming months.
“This is a long-term, sustainable growth driver, and we are hoping that in the next couple of years we can see a sustained, significant increase in sales and prices,” Hens.
“And if we don’t see that in 2017, it’s going to be tough to sustain this growth.”