Good news for Wisconsin properties

With all of the recent bad news about housing, this morning the Business Journal of Milwaukee is reporting that southeastern Wisconsin home values posted gains of about 6%, which has to be considered good news.

Not surprisingly, the headline is “Property value growth slows in southeast Wisconsin”, so I guess we can’t miss an opportunity to take good news and make it less good. Of course value growth is going to slow! Did anyone around here seriously expect the gains of 12%+ in the last couple of years to keep on forever?

Right now, I’m sure a lot of investors would be quite pleased with 6% appreciation in their portfolios. Just goes to show that housing, in addition to being functional, is still a great long-term investment.

According to the Office of Federal Housing Enterprise Oversight (OFHEO), the U.S. has averaged about 7.18% appreciation in the last ten years.  Between 1990 – 2000, the average was only 3.32%.

In short? We’re doing just fine, thank you.

Milwaukee’s current housing market

Let’s start by taking a look at Milwaukee’s current housing market.

There’s no shortage of bad news about the U.S. housing industry in general. The good news for us is that metro Milwaukee is in pretty good shape. We never participated in the huge price increases that other regions saw, and now we’re not participating in the huge declines that some areas are seeing. And while price appreciation is not as high as it’s been in the past, prices are holding steady.

For builders and remodelors, this will likely mean that we’ll still be pretty busy throughout the year. While some areas will see a decline in new construction, that decline was almost inevitable given the remarkable run of the last few years.

For customers, this is still a great time to build or remodel. Lumber prices are down almost 10%, according to Random Lengths. Many subcontractors, while still busy, have some excess capacity that they’re willing to negotiate price on. And while oil costs will impact the cost of many building materials, the reduced nationwide demand for these materials should hold prices fairly steady.

Combine these factors with very attractive mortgage rates, and the metro Milwaukee area should have a decent year.

What are your thoughts?