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Low inventory makes for turbulent local real estate market

By Josh Staloch

BROWN COUNTY – These are crazy days for real estate agents in Brown County.

Factors like low interest rates, along with equally low inventory, are combining to keep agents as busy as ever.

Buyers, who happen to be in the market looking for a starter home in the $150,000-$200,000 range, need to be prepared to act fast once they find a house, because nothing stays on the market these days for long, said Jessica Voss of Coldwell Banker.

“There are probably 25 buyers for each property that gets listed, especially under the $300,000 price point,” Voss said. “I’m working harder than I ever have in my career and sometimes feel like a hamster on a wheel.”

Agents have to be ready to write an offer on a listed property at a moment’s notice, and they also often have to be prepared to go right back with a second offer should a counter be presented, she said.

Offers to purchase are currently being written for well over asking price, and agents are advising prospective buyers to structure their opening offers accordingly, Voss said.

“Interest rates are very low right now, and so people have more buying power,” said Ben Bartolazzi, owner of Ben Bartolazzi Real Estate Team. “I think that’s helped prices go up. With monthly rates lower, people can go out and afford a home at a higher price point.”

Bartolazzi said as the cost of renting a home goes up, buying becomes more attractive the lower interest rates get, which makes the field of buyers more crowded.

He said the reasons behind interest rates being so low are numerous, but some of the factors are familiar.

During the financial calamity of the Great Recession, the Federal Reserve dropped rates to provide the spark needed to get the economy rolling again.

This laid some of the groundwork for what we’re seeing today, said Marc Schaffer, associate professor of economics at St. Norbert College.

“So we had this massive recession, massive housing crisis. We dropped interest rates to near zero to respond to that, but unfortunately, that still wasn’t enough to get the economy going back then,” Schaffer said. “Well, they stayed that way for seven or eight years. We recently in the last few years saw them climb again. Then what we saw when the coronavirus happened was they went right back to dropping the rate to as close to zero as possible to help the economy out. The whole logic here is that they want to make it as easy as possible for people to spend money. In the midst of a health crisis, they don’t want to also be dealing with a financial crisis, so they’re doing everything they can to calm that sector.”

These days, social distancing is a theme in all aspects of life, and the real estate market is seeing some changes directly related to the COVID-19 pandemic, Voss and Bartolazzi said.

For the time being, they said there are no more large-scale open houses, showings are generally limited to one couple touring a house at once, and face masks are encouraged.

Another COVID-19 induced factor in the local real estate market involves rental properties, populated mostly by young people and commuters, Voss said.

What she said she is seeing in the rental market is a lot of people now spending the majority of their time at home where they used to be at work.

In these situations, people can begin planning to move on to something a little more spacious.

“You’re seeing people stuck in an apartment for 24 hours a day,” said Voss. “It’s tight. There’s noise, there’s tension. So it sort of pushes renters along to look for a house instead.”

The situation lends itself to a flood of activity at the area’s most popular housing price point ($160,000-$200,000) and can make upgrading a living arrangement a tough task as price tags on starter homes keep rising significantly, Voss said.

According to Wisconsin Realtors Association, the median home price in Brown County is currently at $240,000, an 11 percent increase from 2019’s median of $216,000.

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