Home sales for the metro Milwaukee area ended August down 18%, according to a report from the Greater Milwaukee Association of Realtors.
Milwaukee County sales were down 20.2% from last year. Ozaukee and Washington counties were down roughly 18% and Waukesha County home sales were down 13.6%, the report said.
Outside the metro area, the results were roughly the same. Like Milwaukee, Racine County saw a 20% decline in home sales, Kenosha was down 11.8% and Walworth was down nearly 2%.
Here's what we know about the state of the real estate market.
More: How does the Wisconsin housing market rank in the U.S.?
Why are sales down?
The report states sales were down "because of a lack of inventory, not a lack of buyer interest. Thedeficiency in inventory is due to two market forces: new construction and listings."
A year ago new home construction permits was at nearly 1,200 permits, but so far through July, construction permits were an "abysmal 870 units" in Milwaukee, Waukesha, Ozaukee and Washington counties., the report said.
Does that mean prices are going down?
No. On the contrary, the average home price rose 9.5% from about $356,500 to $390,500. The reality spells doom for potential homebuyers.
"In the near future it does not appear that the market will achieve any kind of balance to benefit buyers," the report states.
Are new home listings also down?
Nope. New home listings went up for the first time in 17 months, growing 7%. Milwaukee County led the way in this area with 10.6% more new home listings than last year, going from 1,184 to 1,310. Overall in the metro area, listings grew from 2,028 in 2022 to 2,170.
However, outside the metro area new home listings suffered. Racine County saw the largest decline of any county in the southeastern Wisconsin area, with nearly 23% less new home listings from a year ago. Kenosha County also declined 11.6%.
Homes aren't being sold, but listings are going up? What's the problem?
Lack of new construction.
"The systemic problem with the market is the lack of new construction of single-family houses and condominiums, and over reliance on apartments to satisfy demand," the report states.
"That bottleneck combined with the demographic surge of Millennial and GenZ buyers and reasonable interest rates have all contributed to a historically tight market."
And that lack of new housing construction could have generational impacts.
"The imminent danger for the region if it does not create additional supply in the form of more single-family and condominium units, is that thousands of would-be homeowners will be forced to continue to rent, forgoing the opportunity to build wealth through a home’s equity and all of the other benefits of homeownership," the report states. "Rather they have been, and will continue to, pay thousands of dollars a year in rent with no ability to save for a down payment, pushing off their opportunity to achieve the American Dream even further."
This article originally appeared on Milwaukee Journal Sentinel: August home sales sank 18% while prices went up, per report