Milwaukee Housing Market in Pain

One in four homeowners is underwater on their mortgage. That is putting pressure on the real estate market. Homeowners that would typically look to upgrade during the recent historic rates are helpless and unable to sell their current homes. We talked in a previous blog about sellers needing to fix their home to make sure it met all different program guidelines. There is a new fear and that is the neighbor who fire sells their property.

A new disturbing trend is homeowners getting out while the getting is good. They will sell their home $20,000 below the current market value of similar homes in the area. Once they have someone interested in their property they will do anything to rid themselves of their property. I am not sure I can blame them.

Every week there are new reports being released that state the housing markets will depreciate again this year. A home that has a value of $200,000 will lose 5-10 percent if you believe the experts. That means the seller will lose ten to twenty thousand if they keep their home until the same time next year. A bird in the hand is the saying that comes to mind. What are the results of these actions?

I have clients currently in Madison that are refinancing their home. They refinanced last year and had an appraised value of $470,000 and now the home appraised for under $400,000. Did they lose 20% equity over the last 12 months? No, they did not lose that value. The only properties currently being sold are under pressure to sell. Most homeowners are waiting out the stabilization of the housing market. Those who can not wait must sell at greatly reduced prices to get buyers interested in their properties. The effect is properties owners being shocked at the appraised value of their home when they try to refinance. In some cases it is stopping them from refinancing.

Here is an article from JSonline that I was recently quoted in regards the Milwaukee Housing Market