What do Willem Dafoe, Bon Iver and fish fry have in common?
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Birthplace of Hollywood legend Willem Dafoe, Grammy Award-winning band Bon Iver and even the iconic (and delicious) fish fry, Wisconsin is a jewel in the Midwest’s crown. And, with house prices remaining competitively low post-COVID, it’s become a hotspot for buyers looking for luxury at an affordable price. So much so that Oshkosh, Wis., was actually ranked as the most desirable real estate market in the US in July of 2024, with a median list price of $374,000 and homes typically selling within 18 days.
It's also become a dream location for investors, with Dave Hartman, a Guild Mortgage loan officer, telling MPA that Wisconsin is luring remote landlords.
“Since real estate is much more affordable in the Midwest, we’re seeing a growing interest from out-of-state buyers purchasing investment properties here,” Hartman said. “Technology plays a big role in this trend. Buyers are now comfortable managing properties remotely – if there’s an issue, they can FaceTime and say, ‘Hey, here’s what’s going on,’ and then call the plumber to replace the hot water heater. It’ll be interesting to see how that transpires further, but I think that’s going to continue.”
‘I’ve never really been into the “fancy” products’
The economic climate is also shaping refinancing strategies, although the approach in Wisconsin differs from other regions. As Hartman explained, rates dictate everything – and shiny new products won’t change the hard realities for brokers.
“Throughout my career, I’ve never really been into the ‘fancy’ products or the trendy products. I haven’t done any interest-rate buydowns, like a seller-funded buydown – it’s just not happening here yet,” he said. “I think if rates rise and the demand cools down a little bit more, as it has in other parts of the country, that might change – however, we’re not seeing it here just yet. The only transactions where I’ve got sellers paying anything are when it’s a for-sale-by-owner situation. For example, if someone has been renting a house from the owner for 20 years and now the owner, who’s elderly, wants to unload the property. Or if we receive back a higher-than-purchase-price appraisal and implement some seller-paid costs as the transaction evolves”
In the broader housing market, mortgage lenders are observing a consistent theme of inventory and interest rates reshaping demand, particularly in regard to first-time home buyers. Despite a desire to get on the ladder, first-time buyers now represent only 24% of home purchases, the lowest proportion since data collection began in 1981. What’s more, people are waiting later to make the move, with the typical first-time buyer now 38 years old, an increase from 35 in 2023 – and the highest median age on record.
In Wisconsin, Hartman said they have access to a state bond loan program to help these clients get on the ladder quickly – the Wisconsin Housing and Economic Development Authority (WHEDA) home loan. And it’s something he’s all for.
“I’ve been a big proponent of WHEDA throughout my career,” he said. “It’s just a great product. Right now, it’s at 6.25% on a 30-year fixed mortgage, other conventional rates are closer to 7%. You can even couple it with a second mortgage (EZ Close) up to 6% of the purchase price. I can have someone buy a $300,000 house with $500 out of their pocket at a lower-than-market rate. That’s key because, as I’ve seen throughout my career, if you take care of first-time home buyers, they refer friends that are also first-time buyers and one day they’re going to be move-up buyers.”
‘I was at the closing table and I thought I was going to throw up’
Looking back, Hartman said that his entire career hinged on his very own first home-buying experience back in 1997. As he told MPA, when he was sitting down with his broker, the figures made him feel somewhat nauseous.
“I was at the closing table and I thought I was going to throw up,” he said. “Because I was getting an $80,000 loan at 8% interest for 30 years. I remember thinking, ‘How am I ever going to pay this back?’ That experience pushed me to get into the industry – because that realtor and lender really didn’t do a good job. I realized I could do a way better one and ensure no one else felt like they needed to grab a garbage can to throw up at the closing table.”