Forecast Calls for a Hot Winter Market

Message to sellers: Don’t wait until spring to list


When it comes to home sales, fall is the new spring -- at least in 2015. Area Realtors say they expect little to no let-up in market activity through the holiday season and into next year if interest rates remain low as expected.

In fact, this is likely to be among the strongest fall/winter selling seasons in memory, they say – if only they can list enough homes.

"We need more sellers,” said Coldwell Banker’s Joan Read, a member of the Greater Milwaukee Association of Realtors (GMAR) board of directors. “The old thinking that you wait until spring to list or you take a house off the market for the holidays doesn’t make sense in the current environment.”

“There’s a backlog of buyers out there, and it’s mostly the really serious buyers who are out at this time of year. You don’t want to miss them because you’re holding off until spring,” she said. “Who knows where the market will be six months from now?”

Arthur Mays, owner of Realty Among Friends and a GMAR board member, agreed. “I love selling in the winter months because the buyers who are coming out now are a lot more motivated. If you’re thinking about selling, now is the time because you’ve got buyers who are serious.” First Weber’s Amy Curler, also a GMAR board member, noted that September sales were the highest in 10 years, rising 13.1% over the year before. The trend has continued in October. “The market has been fantastic this whole year and it’s not slowing down as it usually would,” she said.

“For sellers, I think there’s some risk in waiting until spring to list. Buyers may fall off as interest rates tick up,” she added, noting that interest rate changes affect home affordability more than home prices since most of a buyer’s monthly payment goes toward interest.

North Shore Bank’s Stephanie Glowinski-Moeller, a mortgage loan originator, said Federal Reserve watchers are predicting that rates -­currently running below 4% on a typical 30-year, fixed rate loan -- will rise to around 5% by the end of 2016.

That is still relatively low by modern historic standards. Still, the prospect of paying more later for the same house has a steady stream of prospective buyers visiting mortgage lenders’ websites at North Shore Bank and elsewhere to obtain pre-approval letters they can use to show sellers and agents they are qualified buyers.

“This time of year, you assume it’s going to slow down, but I’m seeing a lot of people visiting my website to get a pre-approval letter, which they can obtain immediately if they qualify,” Glowinski-Moeller said.

“A lot of Realtors want to see a pre-approval letter before they even show people a home in this market,” she added. “With well-priced homes often attracting multiple bids, they don’t want to find out after the fact that a bidder can’t qualify for a mortgage on the home.” 

New federal regulations that went into effect October 3 impose additional restrictions on mortgage lenders that are slowing the closing process, she noted. “This involves additional consumer protections that I think are very good. But now instead of 30-day closings, we’re at 45­day closings.” (Find out more on the new regulations, collectively known as the TRID rule.)

An earlier wave of regulations aimed at protecting consumers from borrowing more than they can afford to repay went into effect in early 2014. North Shore Bank Senior Vice President Michael Kellman said he and other bankers initially feared the new rules would force them to turn down some credit­worthy borrowers. But almost two years later, “I am pleasantly surprised at how frequently we are able to put together deals that I thought might not happen.”

“There are more hoops that have to be jumped through but we’re finding ways to manage those hoops so that, in the end, the answer is yes,” he said.

While the regulatory burden on mortgage lenders may have grown, both Realtors and mortgage lenders say it’s still a great time to be in the residential real estate business. Glowinski-Moeller said, “I think it’s going to be an awesome fall and winter.” 

View the latest North Shore Bank / GMAR Home Affordability Report

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