Home building lags
Permits are down 6 percent in metro Milwaukee area so far this year.
Home building was down about 6 percent in metropolitan Milwaukee during the first half of this year, a new report shows.
According to MTD Marketing Services of Wisconsin Inc., there were 684 building permits issued in Milwaukee, Ozaukee, Washington and Waukesha counties through June, compared with 728 during the same period last year.
While there are fewer homes being constructed, they’re bigger and more expensive.
According to the MTD data, the average value of houses for which permits were sought was $376,768, or almost 9 percent more than the average of $346,092 during the January-through-June period in 2017.
The average size of this year’s new home is 2,976 square feet, up from 2,796 a year ago.
Suburbs with the most home building permits through June were Waukesha, New Berlin, Mequon, Oconomowoc, Menomonee Falls and Summit.
The slower pace of building comes even as real estate brokers say the area could use more single-family houses. The current economics of home building, however, aren’t in sync with the personal finances of many people looking to buy their first home.
Meanwhile, some homeowners who might be in position to afford a newly built house have been staying put, real estate pros say.
Prices fail to align with demand
Although industry professionals say there is a big demand for housing costing less than $300,000, almost no single-family houses are being built in that price range. Builders say that’s because of the rising costs of labor, lumber and lots.
Weather also has played a part in holding down momentum for building any type of home so far this year, said Jonathan Synovic, president of the Metropolitan Builders Association.
“We had a kind of a rainy spring, which doesn’t drive people out to go look at lots, and then we ran into the heat,” said Synovic, who owns Source 1 Project Solutions in Brookfield. “When
you think about moving, those are two things that really don’t get you excited about doing it.”
The report from MTD shows that home construction is down this year in all but one of Wisconsin’s five largest metro areas. The biggest percentage reduction yearover-year in home building has been in the Green Bay-Door County area, where permits fell to 306 from 396 in the first half of 2017, a slide of almost 23 percent.
Permits decreased 20 percent in the Fox Valley, with 335 issued by municipalities through June, compared with 417 in the same span last year.
Permits to build single-family homes and duplexes fell slightly more than 1 percent in Dane County, to 644 from 651.
The only top-five Wisconsin metro area with an uptick in home building was the Racine-Kenosha market, with 378 permits, or 10 percent more than 344 in the first half of 2017.