Bill Malkasian, WRA President, 608-345-9004, [email protected]
David Clark, Economist, C3 Statistical Solutions and Professor of Economics, Marquette University, 414-803-6537, [email protected]
MADISON, WI – After a strong showing in January, home sales in Wisconsin declined in February according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes fell 5.5 percent in February compared to the same month in 2010. The median home price was down more substantially, falling 13.3 percent to $117,000 over the same period.
“Harsh weather in February may be partly to blame, but so too is the fact that last year at this time buyers were rushing into the market to take advantage of the expiring federal tax rebate program,” said John Horning, Chairmanof the WRA Board of Directors. “The existence of the federal homebuyer tax rebates last year inflated February 2010 sales, making a February-to-February comparison impractical,” Horning said. “It’s going to be a while before the distortion in home sales resulting from these programs play out completely.”
Horning noted that for the second straight month, the northern and central regions of Wisconsin outperformed the rest of the state, with February 2011 home sales in the northern part of the state increasing 37.5 percent over February 2010, and sales up by a more modest 6.9 percent in the central region for that same period. In contrast, sales were down between 7.5 percent and 13.2 percent in the other regions. “It’s always tricky to make projections from winter sales figures, but in those regions of Wisconsin where vacation homes make up a larger share of the total market, sales are improving so far this year,” said Horning. “That is worth noting since these areas were especially hard hit during the recession,” he said.
Median home prices in February were down in all regions, with four of the six regions dropping by double-digit margins. Specifically, compared to February 2010, prices dropped 7.9 percent in the northeast region and 9.6 percent in the west region. Prices declined 11 percent in the north and 13.9 percent in the southeast. Median prices also fell 17.2 percent in the south central region and 23.6 percent in the central region over the same period. “It’s difficult to pinpoint just how much of this reduction in median prices is due to seller discounting, and how much is due to a shift in the mix of homes sold in these areas,” said WRA President Bill Malkasian. The first federal tax credit program, which ended in November 2009, only allowed first time buyers to participate, whereas the program in place last year permitted trade-up buyers to also participate. “This may have shifted sales to higher-priced homes last year compared to this year,” he said.
What is clear, according to Malkasian, is that the state economy continues to improve. The state unemployment rate stood at 7.4 percent in January (the most recent data available), which is down from 9.2 percent in January 2010, and well below the national rate, which stood at 8.9 percent last month. “It’s also clear that our housing remains very affordable even as mortgage rates have moved up in recent months,” said Malkasian. The Wisconsin REALTORS® Housing Affordability Index, which shows what percentage of a median-priced home a buyer with the median family income can afford in Wisconsin, was at 255 in February of this year, up from 216 in February 2010. “It is hard to imagine housing in Wisconsin being more affordable than right now, especially if the upward trend in mortgage rates continues,” said Malkasian.
The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 14,500 real estate brokers, sales people and affiliates statewide. All county figures on sales volume and median prices are compiled by the Wisconsin REALTORS® Association and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter. All data collected by the Wisconsin REALTORS® Association are subject to revision if more complete data become available. Beginning in 2010, all historical sales volume and median price data at the county level have been re-benchmarked using the Techmark system, which accesses MLS data directly and in real time. The Wisconsin REALTORS® Housing Affordability Index is updated monthly with the most recent data on median housing prices, mortgage rates and estimated median family income for Wisconsin.