Sales rose with the federal home buyer tax credit, but then deteriorated quickly when the incentive expired in Wisconsin. However, housing values are sliding throughout the state at some of the lowest rates in the country.
In Wisconsin sales were pushed into an early season rebound of sorts by the tax credit, especially in Milwaukee, where closing agents were finishing up deals like an assembly line of bottles at one of the areas beer breweries. Foreclosures and bank assisted short sales made up nearly half of all sales, including those that are sold privately and at auction pressuring real estate values.
Declining prices are projected to sustain through at least the remainder of the year in Milwaukee, despite the market’s lower home price appreciation during the boom and low mortgage rates. Concerns over high unemployment and weak consumer confidence in the economy are making things tough for the housing market. Milwaukee is forecast to see average home prices decline 6.4% for the year.
Bargain priced foreclosures are to blame for the deflation as bankers repossess properties that have defaulted on their mortgages, despite a series of government programs to aid mortgage holders having difficulty making mortgage payments. Negative equity in homes purchased during the boom is forcing many homeowners to walk away from their properties with growing joblessness.
High unemployment in manufacturing and retail sales are also hurting the economy in Madison, leading to an increase in foreclosed properties. Madison is forecast to see average home prices decline 5.9% in 2010.
Green Bay didn’t see the fall-off in home sales as quick as other areas of the state after the expiration of the federal tax credit. A huge inventory of underwater homeowners and rising defaults are complicating matters, however, in Green Bay, which was a target for real estate investors as foreclosures hit the market. More bargain hungry investors should be attracted back to the area over time as more troubled properties hit the market.
Green Bay should be aided by federal programs targeted to aid the area, but like everything else the federal government does it will take time to work through the system before any results develop. In the meantime, bargain priced foreclosures will have a damaging impact. Green Bay is forecast to sustain average home deflation of 5.4% in 2010.
In Kenosha, where they make some of that great Wisconsin cheese the state is so well known for, the financial crisis and tight mortgage lending standards are restricting the market from making a full recovery. High unemployment in construction, retail and lumber are hurting any likelihood of a recovery in the housing market for quite some time. But because home prices never saw the levels that other more urban areas of the state did, Kenosha is forecast to decline just 4.7% on average this year.