1  Introduction

When we first wrote about homeownership rates in Milwaukee, back in January 2020, we observed that the decline in owner-occupancy appeared to have finally bottomed out in 2018. The year 2019 saw a slight uptick in the number of owner-occupied homes for the first time since the Great Recession began. At the same time, we noticed a sharp increase in ownership of properties by out-of-state investors. As it turns out, both these trends were about to accelerate.

From 2018 to 2022, the total number of owner-occupied homes increased by about 2,980. Homeownership fell by 12 percentage points of the city’s total housing stock from 2005 to 2018. In the last 3-and-a-half years, it has recovered by two percentage points. We are still a long way from the owner occupancy levels that characterized the 1990s and early 2000s, but this is real, significant positive change.

The largest proportional gains occurred in the 3rd and 4th aldermanic districts, which cover the east side and downtown. But growth in owner-occupancy isn’t limited to the wealthy, mostly white neighborhoods along the lake. The largest raw increase in the number of owner-occupied houses occurred in the 10th and 5th districts, along the west and northwest fringe of the city, where owner occupancy increased by 2.9 percent of the housing stock. The 6th, 7th, and 15th districts–which make up the near northern core of the city–saw a cumulative increase of 683 more homeowners.

Simultaneously, out-of-state investors have rapidly expanded their holdings. At the end of 2022, they owned over 7,200 houses (18% of the rental stock), up from 5,200 (12%) at the end of 2018. Three private equity backed landlords now account for 20% of these properties, after owning scarcely any before 2018. These companies focus on relatively affordable houses across the north side of Milwaukee, putting them in direct competition with would-be homebuyers in these neighborhoods.

In the early 2010s, real estate investors commonly bought properties from distressed homeowners–whether at sheriff sales or in preforeclosure transactions. These new private equity backed investors instead mainly acquire properties from other, smaller landlords. Increasingly, these houses are sold in package deals and often for cash. This kind of sale completely excludes hopeful homebuyers from the market–even though the residents of these neighborhoods could often afford the houses if they were priced individually.

Section 2 of this report documents the increase in owner-occupancy since 2018. Section 3 describes the concurrent increase in out-of-state investor activity. Section 4 discusses the consequences of this competition between homeowners and investors. Section 5 traces property transaction flows between different classes of ownership. Section 6 concludes with observations about the trajectory of Milwaukee’s housing market since the Great Recession.