Is rent going up next year in Milwaukee, and how will it affect the housing market?

Yes, likely yes. And here’s why: Supply and demand!

• If builders were to add excessive new rental property supply, then renters have plenty of options to choose from and rents go down. Landlords would be compelled to lower their prices to attract tenants.
• However, We can see from number of permits pulled by builders in Wisconsin the construction market is slowing down, and we are returning to pre-covid lows. This data is publicly available from my favorite government website, FRED.
• In fact, the number of permits we are seeing for new housing is trending toward the lowest levels we have seen in 25 years. Ever since the 2008 crash, the market hasn’t recovered. Prior to 2008 Wisconsin saw an average of 7,600 permits per quarter (statewide), and after the crash, the average has been 4,080. There are more and more people fighting over less and less housing available.
• Milwaukee area vacancy rates are incredibly low, there are 16 renters per vacant unit, according to rentcafe.com. In fact, it was ranked the second most competitive rental market in the country! Maybe not the recognition we were hoping for. 
• This has lead Milwaukee rents to go up about 4% this last year, and considering the rest of the county, as a whole, has gone down -1.2% this year, that makes it even more remarkable! This was reported by the Journal Sentinel.
• As rents rise, it compels more households into purchasing homes, and as demand for homeownership rises, so will property values.

So, here is your punch line: if rents rise, it will encourage property values to rise too. As demand rises for home purchases, so does property values. If you, or someone you know, is considering buying a home, now may be a good time to consider making that purchase, before demand continues to rise in the future!!

Any questions, as always, you can text me at 414-488-0438!