In the News

The Milwaukee Journal Sentinel wrote an article about the improvements to the home building market and shared Tim O’Brien Homes views on the current conditions:

Home building in the metro Milwaukee area is off to its best start in nine years as an improving economy, low interest rates and a shrinking cost difference between new and existing houses have combined to drive up demand.

In the first six months of this year, 665 permits to construct single-family houses and duplexes were issued in Milwaukee, Ozaukee, Washington and Waukesha counties, or almost 19% more than the 560 permits in the first half of 2015, according to data from MTD Marketing Services of Wisconsin Inc.

While that pace still is far from the height of the home construction boom in 2004, when 1,552 permits for new homes were issued in the first half of the year, it’s the most in a January-through-June period since 2008.

Interest rates for housing, now at historic lows, is one factor inspiring people to commit to building a house, Kristine Hillmer, executive director of Metropolitan Builders Association, said Wednesday.

“I think people are really understanding that they are going to go up in the future, and if they want to lock in a low rate, now is the time to do it. I think that is a big driver,” Hillmer said. “Also, the economy in Wisconsin is really stable. Unemployment is really pretty low, and people are just ready to make the move they’ve put off for a long time.”

In addition, the Milwaukee metro area’s limited supply of existing homes for sale is pushing up prices, narrowing the gap between the cost of an existing house and a new one.

“When you have a seller’s market, of course, the prices go up,” Hillmer said. “Well, the differential between new and existing is now getting smaller, and people are saying, ‘You know, for just that little bit more we can get a brand-new house and get what we want.'”

MTD’s data shows the average value of homes being built in the four-county metro area so far this year is $345,798. The Greater Milwaukee Association of Realtors said this week there is a lack of listings for existing homes priced at less than $350,000.

Tim O’Brien, president of Tim O’Brien Homes, said many residential lots that largely became dormant during the recession and its aftermath have become available, offering people a chance to build a house in neighborhoods that aren’t far from Milwaukee and major suburban commercial areas. O’Brien said he is constructing homes in seven market areas in metro Milwaukee.

“A lot of what you’re seeing now is really opportunity in terms of lots that are available in what I would say are prime corridors of the metro Milwaukee area,” O’Brien said.

Many builders, reluctant to put up “spec” houses — houses constructed with speculation that a buyer would be found — in the aftermath of the recession, now are willing to take a chance.

“The existing supply of the speculative homes are moving very quickly,” Hillmer said. “Our members have really learned — those who were around during the downturn and were stuck with a lot of inventory. They’re being smart about what kind of spec houses they build. So they’re building houses in that range where more people are likely to buy, rather than the extravagant houses and holding onto them for a while.”

Menomonee Falls leads the metro area with 65 permits for new houses through the first six months of 2016, according to the MTD data. Among others with the most permits to construct new homes were: Waukesha, 43; Oconomowoc, 40; and Muskego, 32.

The Metropolitan Builders Association announced plans Wednesday for its annual Parade of Homes. The parade, which will feature 20 new homes by 16 southeastern Wisconsin builders, is set for Aug. 13 through Sept. 5. The homes will be in two subdivisions: Windrush in the Village of Hartland and Weyerhaven in Menomonee Falls. More than 30,000 visitors are expected to tour the homes during the three-week event. Read more about Tim O’Brien Homes’ Hickory Parade Home here.

Original article:

Metro-area homebuilding off to best start since 2008

By: Paul Gores of the Milwaukee Journal Sentinel