Milwaukee Journal Sentinel (03/08/13) Walker, Don

With no money available to demolish the city’s growing number of dilapidated and abandoned homes, Mayor Tom Barrett said Friday that the city would ask the Legislature’s Joint Finance Committee to redirect $2.25 million from a national mortgage settlement to address the problem.

City officials are still smarting over an estimated $24.3 million in proceeds from a national mortgage settlement case that was not sent back to Milwaukee, Beloit and Racine that could have been used for demolition and other costs related to the foreclosure crisis. Assistant attorneys general from 48 states, including Wisconsin, reached a $25 billion settlement last year with five banks and mortgage servicers that were accused of mortgage abuses. Wisconsin received a $140 million share of the settlement, $109 million of which went to consumers.

Last year, Attorney General J.B. Van Hollen and Walker said $24.3 million of that settlement would be put into the general fund. Barrett wants $2.25 million of that money to be redirected back to demolish homes that are too far gone to save.

At $15,000 per home, that will only be enough money to demolish 150 homes. Over the next three years, Barrett said raze orders in the city are expected to grow to 1,600 homes, with a cost of $24 million.

“We have a very severe problem right now,” Barrett said.

Between 2010 and 2012, the city took down 494 homes, many of them concentrated in high-crime, poverty-stricken neighborhoods on the north side.

The city also has committed millions of its own money in addition to federal stimulus assistance and a $500,000 grant from the Wisconsin Housing and Economic Development Authority.

Barrett said he may consider asking the Legislature to redirect even more money, a request that would include aid to other foreclosure-ravaged cities in the state, including Be loit, Racine and Kenosha.

Barrett also said the city is reaching out to major banks that control foreclosed properties, businesses and foundations for financial assistance to address the problem. Barrett said he also planned to confer with the Metropolitan Milwaukee Association of Commerce and the Greater Milwaukee Committee.

“We are saying we need more help,” Barrett said.

Barrett made the announcement at an unusual meeting Friday of top city officials, including Police Chief Edward Flynn; Art Dahlberg, commissioner of the Department of Neighborhood Services; Common Council President Willie Hines; Ald. Michael Murphy; and a group of Democratic legislators whose districts include portions of the city.

City officials also had invited Republican legislators who have districts that include some parts of Milwaukee, as well as members of the Joint Finance Committee. But none of those legislators attended the meeting, held at the Police Department’s District 3 headquarters.

Murphy said the state’s decision to keep the $24.3 million angered him. “I see the devastation. I’m tired of the rhetoric,” he said.

“I am beginning to see the wear and tear they have and they face,” Hines said of residents living in his north side district. “The board-up situation is really straining them.”

The reason, explained Flynn, is the linkage of the housing crisis with crime and poverty. City officials have prepared data that show a high correlation between crime and foreclosure in the city.

Murphy and other city officials say the city has lost $3 billion worth of property values since the housing and foreclosure crisis began to take hold in early 2008.

Noting the absence of Republican legislators at the meeting, Barrett said some of their constituents who live in Milwaukee are bearing the economic cost of foreclosure and abandoned homes.

“This does have an impact on their constituents,” Barrett said.

In addition to seeking state funds and approaching banks, businesses and foundations for additional funds, Barrett said his administration had begun to approach major lenders in the city asking them to help homeowners avoid foreclosure. In addition, the city has hopes of winning the Bloomberg Challenge, a nationwide competition worth $5 million. Milwaukee’s proposal seeks to transform foreclosed properties that would be razed into urban farms and distribution centers to provide a new supply chain for nutritious food.

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Home Sales Up 16.4% in February

March 12, 2013 ? The 4-county Metropolitan Milwaukee housing market continued plowing through the winter in February, posting a 16.4% increase in sales over February 2012. There were 960 sales in February, the most for that month since 2007 (1,033), just before the Great Recession began; and marking the 20th month in a row of increased home sales.

Click here to view the graph showing actual sales over the last 20 months. Note the higher level of sales in January and February 2013 compared to the same months in 2012, indicating a much stronger beginning to 2013.

While the continued housing recovery is certainly welcome news, and hopes are that the trajectory of sales depicted in the graph above for 2012 follows into 2013, there is concern over the very low levels of inventory in the market.

The market had 7.08 months of inventory in February (calculated by the number of active listings divided by the average monthly sales over the previous 12 months), which is well below the 11.63 months in February 2012. Only 1,952 homes were listed in February 2013, down 18.3% from a year earlier.

REALTORS? are listing homes to be sure, just not at the rate the market indicates it needs to satisfy current demand. Confusion and skepticism among potential sellers over what price their home might sell for seems to be the main culprit in their hesitation to list.

Sellers will undoubtedly not fetch prices from the peak of the market, however, prices have stabilized in most communities. And, due to the low levels of inventory the length of time a house is on the market has shrunk significantly.

The law of supply and demand would seem to dictate prices should increase soon. With a low supply of homes, stable or increasing demand, historically low interest rates, and positive external factors such as consumer confidence and employment, prices should be pushed upward as buyers outbid one another for a listing.

However, the overall economy is not blazing any trails, job creation is tepid, mortgage applications are detailed and time consuming, and multiple offers are bidding up to a property?s asking price and often including seller concessions. In short, the market is still working through a few challenges that may be holding overall growth back.

While the market is strengthening, it is still too early in the year to say with any confidence that the Milwaukee market will see universal price increases this year. It is still a buyers? market, but just slightly.

This was sent by the Greater Milwaukee Association of REALTOR’s?.

?2012 Greater Milwaukee Association of REALTORS?. All Rights Reserved.
12300 W. Center Street Milwaukee, WI 53222
Phone: 414-778-4929 Fax: 414-778-4920

Madison – Gov. Scott Walker pledged Thursday to cut income taxes in the state budget he signs this summer, calling it the best way to spark the economy. But he also said the reduction would be phased in over a number of?

Gov. Scott Walker proposes cutting income taxes

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