Elm Grove - One month can mean five months when you're trying to buy a house. In November, there was a 12-month oversupply of homes on the market in Elm Grove. In December, it was a 17-month oversupply.
The problem isn't unique to Elm Grove, but reflective of the nation's housing crisis. Communities like Elm Grove, where unemployment and crime are basically non-issues, where the average home values are about twice the national average, aren't impervious to the clutches of the mortgage bubble.
"With the rates at this historical low, and I know I'm not the only real estate agent saying (this), there should be more activity," explained Allison Quartuccio, broker associate at Nextage Progressive Realty.
"I think people are still afraid of the economy and have we really bottomed out yet. How much further can we go?"
It's hard to imagine phrases like "bottoming out," in a community full of beautiful homes, but homes in Elm Grove aren't moving.
Summer home sales this year were better than 2010 based on the length a house spent on the market, but the winter months in early 2011 were brutal, with back to back months - January and February - where there was a housing inventory backup of nearly two years.
In fact, from September through November, each month saw single digit numbers of new housing listings. Since December of 2009, a three month shortage like that hadn't happened in Elm Grove.
Historical or outdated?
There are a few reasons Elm Grove hasn't seen a significant recovery, all of which have to do with the types of homes on the market in Elm Grove. According to Quartuccio, the historical nature of the community means some homes are out of date.
"If you look through the pictures online, a lot of (houses) are dated. They need work. You can go to other pockets and get a more updated home," she said.
"You can go into Brookfield and get a newer home for the same price, or go down maybe to 'Tosa for a more historical home for the same price."
Tight family budgets may be quelling desires to move into homes needing work, but the consumer may have changed over the last few years.
"A lot of people just don't have vision. It's a breath of fresh air when you have a buyer walk into the property and can say 'Ok, I want to change the carpet, I want to do this or that,' " Quartuccio said.
"I think buyers do need to have some vision."
A home that doesn't necessarily need work, but has significant character, like many in Elm Grove, doesn't suit every taste. A new subdivision in Brookfield with cookie-cutter homes, gives a potential buyer a relatively blank slate where just about any type of furniture or décor would fit.
That means a buyer doesn't have to try and adjust their own stock of home furnishings to accommodate the home, something that would only add to costs.
Adding to the problem, the type of homes continuing to sell just aren't in Elm Grove.
"That magic number is $200,000 or under. Those move, but there aren't a lot of those homes in Elm Grove," Quartuccio said.
Prices affecting village
Homebuyers and homeowners aren't the only ones affected by tumbling home values. The village relies on values to draw revenue as part of the tax rate. That rate is based on every $1,000 of assessed value.
When values fall, the village has two options: raise rates or cut services.
Elm Grove, due to steadily rising home values, had been able to keep rates down while not having to slice services. That hasn't been the case since the bubble burst in 2008.
"We all hope it doesn't get much worse because, frankly, we don't have any fat in our budget," explained Village President Neil Palmer
"From where we are, reduction in cost or expenditure will require reduction in service."
Palmer said the village starts every budget year from zero, insisting departments justify spending not just on previous year levels.
"As a policy, we start with a zero budget. Any program, even if it's existed since 1955, every program, every expenditure is reviewed."
When values fall, if rates remain the same, the village takes in less revenue funding fewer services and programs.
Even if homeowners are not looking to sell, the value of that home affects the taxes paid, and by extension, the services funded by the taxes.
That means not only is Elm Grove not immune to the pernicious effects of the housing bubble, no homeowner is.
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