Milwaukee’s Housing Problem
Gretchen Schuldt has a fascinating post up at Milwaukee Rising about the falling house prices in Milwaukee. She compared the selling prices of houses posted in the Sunday Journal Sentinel with their assessed value. Half of them sold for less than 50% of their assessed value.
Housing data has been mixed in recent months. Some reports have indicated our price per square foot has risen, while others have indicated that the total number of sales is dropping. It’s actually possible both are occuring, since it’s likely the sales of luxury condos in the downtown area are keeping the price per square foot up while while fewer houses are being sold.
One of the statistics used to determine the relatively affordability of houses is the price-to-rent ratio. Measuring how much it costs to own a house in comparison to renting, it’s remarkable how out of whack the Milwaukee market appears to be compared to the 15 year average compiled by Economist.com for Time Magazine.
It’s possible that for as much as we avoided an enormous bubble in housing prices during the initial run up in 2005 through 2007, we still experienced a profound increase compared to the average home price in years past. Gretchen documents just one example of the extreme foreclosure problem in the city’s northern and souther central city neighborhoods, but it also exists in affluent parts of the city; walk through the condos along the Milwaukee River in the Third Ward and you’ll see several for sale signs perched in windows. The question of “Who’s going to live in all these condos?” was asked a lot when many of these buildings began sprouting up during the housing boom — perhaps now we’re learning the unfortunate answer to that question.