Hard Times and High Hopes: Muskego Shows Classic Signs of Great Recession
A series on how America’s Great Recession is hitting home in Muskego.
The New York Times story leaps out like a slap in the face: Poverty is surging in the suburbs, it says, long a bastion of the great American Dream. In my mind, Muskego can be counted among them: a suburb of the big city, while a small city with its own identity.
Muskego has always been a place of opportunity: Great schools, beautiful homes, good jobs in nearby cities. Yet it's not been immune to the economy, and a check of the local housing market provides a stark picture of its effects.
Muskego City Assessor Laura Mecha can tell you firsthand that the American economic crisis is no stranger to Muskego, and she has the numbers to prove it.
Of 207 homes sold from January 1 through mid-October of 2011, 40 percent of real estate activity in Muskego home sales involved “some sort of economic issue, whether it be a foreclosure, post-foreclosure, caused by divorce, job loss” or other stresses. Mecha compares that figure to 2005, when there were only 10 “stressed” sales out of 458 homes sold.
Many of those stressed sales are sitting on the market, and could create a domino effect down the road, Mecha says. Eventually, the city may have to worry about deteriorating property values in middle class neighborhoods, after owners have already turned keys in or walked away from a home they can no longer afford.
“Who’s cutting the grass, who’s paying the bills?” Mecha asks. Property values can be skewed by foreclosures, but housing values are already going down, and services still have to be delivered, she says.
The rise in suburban poverty has been sharpest in communities the housing collapse hit the hardest, according to findings from a Brookings Institute study. Indeed, Muskego’s housing market is still struggling, according to real estate broker Geri Peterson, and she has a word of advice for sellers.
Selling homes on the Muskego market isn’t easy these days, said Peterson, a broker with Heartland Group Real Estate. Of Muskego housing values, she said “I didn’t think it was going to get this low – I didn’t think it could get any worse.”
Homes in Muskego across the board are selling at five to 26 percent below their assessed value, Peterson said, with the biggest drop in values to newer homes built in the last 10 years.
Peterson used to sell five or six homes each month just a few years ago, she said. Now a good month is selling a single home. Easy loans and job security for buyers are things of the past, who simply walk away from a deal and move on to the next one if low offers are not accepted, Peterson said.
“The economy has just hit everyone,” Peterson said. “I’ve never seen people getting such good deals on houses in my life,” she said.
Sellers are finding their hands are tied: they can’t find buyers in times of high unemployment and cuts in pay, and they can’t drop the price, because they may be "upside down" on the home, have to pay commissions and closing costs, and have other expenses to cover.
High Hopes for the Future: Peterson has this advice for retirees and baby boomers who may have a strong desire to sell their house now and in the next five years. “Hold off. Don’t sell your house yet,” Peterson advises. “Wait for the bottom to be hit.”
For Wisconsin HUD approved foreclosure counseling agencies click here.