APPLETON, Wis. (WFRV) – House prices are soaring across the country, and northeast Wisconsin is no different.
Over the last five years, the median value of a home in northeastern Wisconsin has increased by 55%, according to Berkshire Hathaway Home Services Fox Cities broker associate Chris Siamof.
“We’ve seen an increase if you’ve had your house for five years, a 55% increase in value,” she said.
Recent sellers of their family members’ properties, Fox Crossing residents Larry and Bernie Kuepper, said they could not believe the value of the homes.
“It’s just staggering how much the values have increased [in] the last five years,” Bernie said. “Wow. It’s just, wow, to see how much our house is worth. But then the reality sets in that we would pay this much to have to replace it or to move someplace else or to move into an apartment, that was just the amount of the increase.”
The uptick in value is being caused by a supply versus demand issue: there is a shortage of houses being sold and a high demand for the buyers.
“You’ve got the biggest generation, 71 million millennials, buying homes,” Siamof said. “What’s driving this is a shortage. We have 31 million more people than we did back in the crisis of 2008. We had inventories of over 4 million homes back then, there was overbuilding, and we have 31 million more people now, and we have 1.1 million homes in inventory. So we have an extreme shortage, and we’re trying to catch up.”
The higher-than-normal interest rates are also turning current homeowners away from putting their houses on the market.
“So we need people to sell their homes, and part of the problem is almost 70.7% of homeowners have a mortgage of 4% or less,” Siamof said. “So there’s not a lot of incentive to sell their home if the next home is going to be 7 or 8%.”
But with the high value of homes, Siamof and the Kueppers know that the sellers have the upper hand in the market.
“When you have six months [of] inventory, that means you have a balanced market,” Siamof said. “We are in a seller’s market, only 2 or 3 months inventory, there’s an extreme shortage.”
According to the Wisconsin Realtors’ Association, from July 2022 to July 2023, statewide total listings have dropped from 23,137 to 18,345, a 20.7% decline, while the median home price has gone from $279,000 to $300,000, a 14.3% increase, in the same timeframe.
“This area around here is growing, it’s fantastic,” Larry said. “The value of the house goes up every year.”
Bernie said that a decade ago, the land that she and her husband Larry built their house on was being developed and that it was good timing then to buy and, until recently, to sell for them.
“The farmlands were being divided and sold into lots, and now houses or condos or apartment buildings are going up,” she said. “The available inventory is down, which makes it a seller’s market, I guess.”
Siamof also thinks that since the COVID-19 pandemic, more people want larger houses with in-home offices, which is contributing to the increase.
She said that wanting certain amenities is good, and now is still a good time to buy because the market has not peaked, and the house will still accrue value, but then buyers may have to set expectations lower in other areas as well.
“Working from home created an environment where people want bigger homes with home offices, so that’s probably a move up for more people,” Siamof said. “That same home was $279,000, now it’s $300,000, [and] now it’s costing you more to buy it. So get in the game now, maybe scale down your expectations, buy a cheaper home, put some equity into it.”
Siamof said that affordable housing is an issue, as the effects of a tougher market for all prospective buyers leave the ones with less money with fewer options.
“It is creating an affordability issue, it’s taking 14% more income to buy the same house that it did last year because of the interest rates going up,” she said.
While the Kueppers may have built their own house and sold their family members’ houses at the right time, they know how tough the current situation is for other members of their family.
“I have a granddaughter; [she] and her new husband are looking for a house right now, and they’re finding it a very tough market,” Larry said.