Politics & Government

Housing Market May Be Heating Up, But Buyers Are Still Getting Great Deals

Ray Leffler, owner of Newport Development, has a strong pulse on the housing and commercial real estate market in southeastern Wisconsin. He says there's still a lot of pent up demand for new construction.

Ray Leffler, owner of Newport Development, is more optimistic about his business now than in past years.

He buys and sells existing properties, builds new homes, and has a stake in several commercial real estate projects in southeastern Wisconsin. Houses are selling at a brisker and faster pace even though prices are still down; more people are showing up to tour his model homes and he’s seeing more interest in his commercial properties. Subcontracting costs have also increased, especially with millwork, siding and roofing – and that’s because those subcontractors are getting more work.

To put things in perspective, in Racine and Kenosha counties there have been 64 new homes built through April; the same level we had in all of 2009.

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“And that was considered to be the toughest year,” he said.

And in Caledonia, they’ve had 12 new home construction permits pulled through May.

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But all of this interest doesn’t translate into a housing boom by any means. People interested in buying new homes often still need to sell their existing homes and right now there’s a lot of price pressure to sell homes less than the fair market value, Leffler said.

“There’s a lot of pent up demand in people who want to build,” Leffler said. “A lot of them are not willing to take the hit on their existing homes to move up into a new home. But I believe we’re at the bottom of the cycle.”

However, a number of home sellers in Caledonia continue to take huge hits.

For example, a home in the 7000 block of Lakeshore drive sold a few weeks ago for $45,540 when its estimated fair market value was listed as $157,592 in 2011. A home in the 6900 block of Novak Road also recently sold for $155,300 but its estimated fair market value was $310,578 in 2011 and in 2008 the fair market value was listed at $452,000 in 2008. Also, three lots in the former Blue River Preserve subdivision sold between $38,000 and $46,000 when their fair market value was estimated between $98,000 and $136,000.

The number of vacant homes, 90 percent of which were from foreclosures, remain at about 95 and that’s about the same number they had last year, said Brian Dey, the weed commissioner for the Village.

“We’re still getting three to six new ones (complaints) each week,” Dey said.

Leffler said there was a home on the market where the sale hasn’t been finalized over on Rio Vista Drive that has a pending sale of $50,000 and was sold through a foreclosure sale; the estimated fair market value was $170,000.

While the number of new housing starts is increasing, Leffler is still optimistic.

“Remember if you had 12 new homes last year, even if it’s 24… it is still twice as much as you had and that means an increase in revenue for the Village,” he said.


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