As reported by the Milwaukee Journal Sentinel in 2020, many investors describe Milwaukee real estate market as an unstoppable force as the demand for housing continues to grow despite the pandemic. In addition, this condition is also perpetuated by the lack of available inventory in the region, which drives the prices up.
Despite the increasing price, investors still purchased up to $137.8 million worth of property in the first quarter of 2022, as reported by Milwaukee Business Journal in June 2022. The report further explained that the average home values in the metropolitan area of the region had increased around 14% since May 2021. As a result, most investors took an aggressive approach to secure the soon-to-be rare investment property.
As a part of the Midwestern United States, Milwaukee provides a one-of-a-kind opportunity for investors to invest in real estate. Besides its vibrant city life, the demand for a rental property in the City of Milwaukee seems to be doing well, according to a 2020 report by WisBusiness. So, what’s more, to like about Milwaukee?
Milwaukee Metro Population
Milwaukee, officially named the City of Milwaukee, is one of the most populated cities in the state of Wisconsin. As reported by the 2022 census by the United States Census Bureau, the Midwestern city had around 577,222 of the population with a population density of 6,001.2 inhabitants per square mile.
In addition, the metropolitan area of Milwaukee is home to around 1.6 million residents. With such a high population, Milwaukee is the 31st largest city in the United States and the fifth largest city in the Midwestern region of the US.
In terms of population growth, the United States Census Bureau estimated that Milwaukee had a declining population of 1.4% since 2020. Although the city population had been declining for the last six decades, a September 2021 report by Milwaukee Journal Sentinel reported that the nearby suburban cities’ population grew rapidly over the last 10 years. The declining city population is fueled by people’s desire to move to the suburban area, which was aided by federal subsidies for the highway.
In the past, Milwaukee’s economy was supported by various industries, including manufacturing, stockyards, rendering plants, shipping, and other heavy industry. At the present, the Wisconsin State Journal article dated 2013 reported that the City of Milwaukee is the international headquarters for five Fortune 500 companies, including Johnson Controls, Manpower, Northwestern Mutual, Harley Davidson, and Rockwell Automation.
With the strong economic support from various industries, the United States Bureau of Economic Analysis estimated that the total GDP of Milwaukee-Waukesha-West Allis, Wisconsin in 2020 reached 87,950 million. The number has shrunk by around 4% since 2019. As reported by Biztime in December 2021, Metro Milwaukee’s manufacturing industry, which accounts for 16.7% of the region’s GDP, declined by about 5.8%. In addition, the professional and business services, which account for 14.6% of Milwaukee’s economy, saw a 5.2% decline.
As reported by Wisconsin Public Radio in October 2020, the decline in the state’s GDP happened due to the spread of the COVID-19 pandemic. However, with rapid economic recovery during the post-pandemic period, the economy in the region is expected to recover.
Milwaukee Job Market
As reported by Urban Milwaukee in June 2022, Wisconsin’s job market remained strong despite the sharp decline on Wall Street. As stated by the Wisconsin Department of Workforce Development, the number of Wisconsin residents who are working reached 3.06 million in May 2022. In addition, a May 2022 report by the United States Bureau of Labor Statistics revealed that the Milwaukee-Waukesha-West Allis region had around a 3.4% unemployment rate, a slight decrease since April 2022.
As reported by Choose Milwaukee, some of the largest services by number of employees in the region include the health care system, health care service, food distributor, and department store, with 40,200; 9,700; 8,300; and 7,800 employees respectively. Furthermore, the most recent US News report also shows that the average annual salary in Milwaukee, Wisconsin is around $55,040.
Cost of Living in Milwaukee
The cost of living in Milwaukee is considerably cheap compared to other Midwestern cities in the country. Numbeo estimated that the monthly cost of living in Milwaukee for a family of four is $3,213 without rent. This makes a single person’s monthly cost come to around $914 without rent. The website also indicates that the average rent prices in the region are 38.17% lower than in the neighboring city of Chicago.
Furthermore, PayScale’s most recent report shows that the cost of living in Milwaukee is 2% lower than the national average. In addition, the website also indicates that the city has experienced a 3% decrease in groceries prices.
Overview of Milwaukee Real Estate Market
Despite the rising housing cost, the Milwaukee real estate market is still considerably affordable. As a result, a 2021 article by Forbes dubbed Milwaukee as the seventh most affordable city to buy a home. Besides the housing affordability, there are more aspects you will like about Milwaukee, including fast infrastructure development and a strong rental market. Below are some stats that may help solidify your decision to invest in Milwaukee real estate.
Stats on Milwaukee housing market
As previously hinted, home values in Milwaukee experienced significant growth over the last five years. As of June 2022, Zillow reports that the Home Value Index in the Milwaukee region comes at around $183.843, with a 12.5% appreciation from the previous year. In addition, a report from Realtor.com of the same date indicates that the median listing home price for average houses in the region is around $139 per square feet, with the median sold home price of $204,5000.
With the rapid appreciation of home values, Realtor.com indicates that the Milwaukee real estate market is in the heavy favor of sellers. This means that more people are looking to buy a house than the number of houses available. In terms of listing prices, Redfin reported that the average Milwaukee homes are sold for about 3% above the listed price, while hot homes can sell for about 10% above the listed price.
Stats on Rental Properties Milwaukee
As reported by the United States Census Bureau in 2020, around 59.3% of housing units in the City of Milwaukee are renter-occupied. However, the shortage of housing units and the prolonged effect of the pandemic make it difficult for residents to find a place to live. In addition, according to June 2021 report by WTMJ-TV Milwaukee, rentals for single-family homes had gone up pretty significantly, which makes Milwaukee ideal for rental property investors
The fact that this Midwestern city is ideal for rental property investment is supported by several statistics. For instance, as of July 28, 2022, Zumper reported that the median rent price for three-bedroom houses is around $1,350, with an 8% year-over-year change. In 2022 alone, the average rent for a single-family house has gone up significantly, from $1,196 in January to $1,356 in July.
However, it is essential to note that the rent price varies between neighborhoods. In the case of Milwaukee, some of the most affordable neighborhoods in terms of rent are Williamsburg Heights, King Park, and Clarke Square, where the average rent can go from $350 to $450. On the other hand, the most expensive neighborhoods in Milwaukee are Harbor View, Haymarket, and Hillside, where rent can go between $1,515 to $1,550.
Historic Price Changes and Housing Affordability in Milwaukee Market
Historic pricing and the housing affordability index (HAI) are two of the most important aspects to consider before investing in real estate. Simply put, investors use historic price changes to determine how much money they need to invest in a certain number of housing units. On the other hand, the housing affordability index measures the typical family income required for a mortgage loan based on recent price data.
Some data suggest that the price of housing in Milwaukee is rising rapidly over the years. Data from Redfin reveals a somewhat fluctuating but consistently-appreciating trend of house value in Milwaukee, Wisconsin. According to the data, the median sale price of all home types in Milwaukee was around $135,000 in 2017. As of June 2022, the median sales price has gone up to $195,000, with a growth rate of 2.6% year-over-year.
In addition, the United States Federal Housing Finance Agency revealed that the house price index for the Milwaukee-Waukesha region has increased exponentially since 1995 (Q1:100), reaching a record-breaking price change of 244.44% in 2022.
On the other hand, a July 2022 report by Patch revealed that home prices in Milwaukee County are soaring high. As reported by ATTOM Data Solution, Milwaukee County scored 68 on the housing affordability index (HAI) for the second quarter of 2022. According to ATTOM’s standard of measurement, HAI under 100 indicates that housing is less affordable compared to the historical average. This number is significantly higher compared to the second quarter of 2021 with 84 and the first quarter of 2022 with 82.
Milwaukee Real Estate Valuation and Forecast
Uncertainty is one of the downsides of property investment. However, we can roughly predict the future by paying attention to the current state of the market. In the case of Milwaukee, the market seems to be in a constant trend of appreciation, which makes it ideal for real estate investors.
The fact that Milwaukee real estate market is heading towards a brighter future is supported by several statistics. For instance, the average home value in the Milwaukee-Waukesha-West Allis region has appreciated by around 79.2%, as reported by Zillow in 2022. In addition, home values in Greater Milwaukee have gone up 12.5% over a year.
In addition, Zillow also predicts that the current home value index will continue to rise for the next 12 months. This forecast is supported by the fact that home prices in the seven counties in Southeastern Wisconsin have gone up by 10.8%. In addition, the average home prices have also gone up by 9.5% in the four-county area during the first quarter of 2022.
Milwaukee Real Estate Market FAQs
- Is the Milwaukee market a buyers’ or sellers’ market?
As reported by WUWM 89.7 FM, the Milwaukee real estate market remains in heavy favor of sellers. This means that more people are looking to buy a house than the number of houses available in Milwaukee. The lack of available housing is accelerated by the spread of the COVID-19 pandemic in 2020. As a result, the home values in the region have increased exponentially over the last three years.
- Is it a good time to buy a house in Milwaukee?
Several data show that the Milwaukee housing market will experience a steady price growth for the next 12 months. This is supported by the ever-increasing house price in the region, which hit an all-time high in 2022, with the house price index of more than 244% since Q1 in 1995. So, if the price goes steadily upwards, now is the right time to buy houses in Milwaukee.
- How is the Milwaukee housing market?
Realtor.com reports show that the home values in Milwaukee have increased by 14.3% since last year. In addition, due to the rapid appreciation of home values, Realtor.com indicates that the Milwaukee real estate market is in the heavy favor of sellers.
- Are house prices dropping in Wisconsin?
As of March 2022, the Wisconsin Realtors Association report shows that the median price of a home in Wisconsin has skyrocketed over the past year by 10.2%. The report also revealed that the median price for homes had gone up from $230,000 in 2021 to $253,000 in March 2022. So, the house prices in Wisconsin are rising, not dropping.
Milwaukee has one of the most unique real estate markets in the country. House prices continue to rise, hitting a record-breaking number each year. As a result, investors are urged to use aggressive approaches when investing in the real estate market in the region.
In addition, the uniqueness of the market comes from the rarity of housing units in the region. On top of that, Milwaukee residents seem to prefer renting over owning a house. This condition creates a one-of-a-kind opportunity for investors to invest in real estate in the city, particularly rental property. So, if you wish to make some fortune by investing in rental properties, look no further than Milwaukee real estate.