Suburbs still growing with seller’s market

The Business Journal of Milwaukee – May 5, 2000
by Kelly Quigley

Bill Carity, owner of the Brookfield development firm Carity Land Corp., won’t waste any time when he builds the new Quiet Wood Creek subdivision in the city of Muskego.

Typically, when building a 142-lot development, Carity would break the project up into several phases and sell a few lots each month. But Carity knows the current suburban real estate market is so hungry for more than that, and he’s decided to take a riskier move and develop all the lots at once.

“Under normal conditions, I would phase the development into 60 lots at a time,” Carity said. “But I have expectations that I can sell most of these even before construction is finished.”

Already, without any advertising, Carity has sold about one third of the lots, which are about one third of an acre. Construction will begin at the end of May.

“Despite the fact that we have higher interest rates than we’ve seen in a number years, the demand for housing remains as strong as my memory serves me,” Carity said.

By the end of March, 1,183 residential building permits had been filed in metropolitan Milwaukee, an increase of 28 percent over the same period last year, according to the Metropolitan Builders Association of Greater Milwaukee (MBA).

However, building permits for single-family homes actually have dropped 15 percent in the area, which is a sign of rising interest rates and a serious lack of land inventory in Milwaukee’s suburbs.

“If you just pay attention to raw data, there are fewer (single-family home) building permits,” Carity said. “Land has been used up, and there are very few large parcels that are available for developers such as myself to acquire and get approved for residential development.”

The lack of inventory is driving up prices, said Matt Moroney, MBA executive director.

“For the past three years, it’s just been an outstanding market,” Moroney said. “But now we’re hearing from developers that there’s not enough available land, and as a result, we’re seeing the average prices of lots increase.”

Anne Rodriggs, vice president of Pewaukee-based David and Goliath Builders Inc., is working with several clients to find land to develop in Milwaukee suburbs. Demand is as strong as it’s been over the past few years, but the lack of land is a roadblock for people who want to build a home, she said.

“For many years, when customers came in to build with us, they already had a lot,” Rodriggs said. “That’s not the case anymore. It’s getting harder and harder to develop the land.”

Brookfield developer Thompson Corp. took a new approach in dealing with the demand, said company saleswoman Laurie Herbst.

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