New Construction To the Rescue

The real estate market in SE Wisconsin is experiencing an unprecedented low inventory. As a result, homebuyers are facing fierce competition and soaring prices. Experts agree that the best solution to this problem is to increase the housing supply, and one way to do this is through new construction. In this blog, we will explore the current state of new construction in SE Wisconsin and whether it can help solve the low inventory problem.

New Construction in SE Wisconsin: The Current State

There are new subdivisions being built throughout the Milwaukee metro area, including Grafton, Mount Pleasant, Hartland, and Pewaukee. However, the question is, how much new construction is happening in SE Wisconsin? According to the latest data from the Metropolitan Builders Association (MBA) of Greater Milwaukee, the number of building permits issued for new residential construction in the seven-county SE Wisconsin region decreased by 5% in 2020 compared to the previous year. However, the decrease is mainly due to the COVID-19 pandemic's impact, which caused some delays in the permit issuance process.

In terms of which counties are seeing the most new construction, Waukesha County currently has the most construction activity, followed by Ozaukee County. The MBA reports that 50% of all new home construction permits in SE Wisconsin are being issued in Waukesha and Ozaukee Counties. Meanwhile, Milwaukee County ranks third, followed by Racine, Washington, Kenosha, and Walworth Counties.

The Importance of New Construction in Addressing the Low Inventory Problem

The low inventory problem in SE Wisconsin is not a new issue. It has been going on for several years, and there are no indications that it will improve in the near future. The pandemic has only exacerbated the problem by reducing the number of homes for sale and discouraging some homeowners from putting their homes on the market. According to data from the Greater Milwaukee Association of Realtors, the inventory of homes for sale in the metro Milwaukee area in January 2021 was down by 34.6% compared to January 2020.

New construction is one of the most effective ways to address the low inventory problem. By building new homes, developers can increase the supply of available housing, which can help stabilize prices and reduce competition among buyers. Moreover, new homes can offer modern amenities, energy efficiency, and the latest technology, which can appeal to buyers who are looking for turn-key properties.

The Benefits of New Construction for Homebuyers

New construction has several benefits for homebuyers. First, new homes typically come with a warranty, which can offer peace of mind and protection against unexpected repairs. Second, new homes are more energy-efficient and often have the latest technology, which can result in lower energy bills and a more comfortable living experience. Third, new homes can be customized to suit the buyer's preferences, from selecting the floor plan to choosing the finishes and appliances.

Additionally, new construction can be an excellent investment opportunity for buyers. Since new homes often appreciate in value faster than older homes, buyers can expect to see a return on their investment in the long term. Moreover, new homes are typically easier to sell, as they offer the latest amenities and are often in desirable locations.

The Challenges of New Construction in SE Wisconsin

While new construction has many benefits, there are also some challenges that developers face. One of the biggest challenges is the cost of construction, which can be higher in SE Wisconsin due to factors such as labor shortages and material price increases. These cost increases can be passed on to buyers, making new homes more expensive than existing homes in some cases.

Another challenge is finding suitable land for new subdivisions. As the population grows and more land is developed, it becomes harder to find land that