Wisconsin Realtors Association: Home sales stabilize in 2011 as median prices fall

For More Information Contact:
Michael Theo, WRA President and CEO, 608-241-2047, [email protected]
or David Clark, Economist, C3 Statistical Solutions and Professor of Economics, Marquette University, 414-803-6537, [email protected]

MADISON, WI – The Wisconsin real estate market improved in 2011 with home sales totaling slightly above 2010 levels, according to a year-end report released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes for 2011 were 0.2 percent above 2010, and the median price of homes fell 6.4 percent to $132,000, according to the report. Monthly trends in home sales ran well above 2010 levels throughout the second half of the year.

“Remember that home sales were pushed into the first half of 2010 due to the Federal Homebuyer Tax Rebate program, so we expected the first half of 2011 to look weak and the latter half to look stronger by comparison,” said Rob Keefe, Chairman of the WRA Board of Directors. “What is encouraging is to see monthly home sales continue to outpace last year’s levels,” he said, noting that home sales in December were 11.3 percent higher than December 2010.

Regionally, sales were typically within 5 percent of 2010 levels. The strongest growth in home sales was found in the Southeast region where existing home sales rose 3.4 percent over the previous year, followed by the North region where sales grew 2.1 percent. Sales in the Northeast region were even, with an increase of 0.1 percent with last year, but sales were slightly lower, down 1.2 percent, in the South Central region. Finally, annual sales dropped 4.8 percent in the West region, and fell 6.1 percent in the central part of the state. Median prices for the year were below 2010 levels in all regions of the state, with prices falling between 3.6 percent and 5.5 percent in five of the six regions. In contrast, the Southeast region dropped 9.1 percent over the period.

The WRA’s report said other economic factors impacting the housing market also showed signs of improvement. “We are seeing some promising signals in the state labor market,” said WRA President and CEO, Michael Theo, who noted that the statewide unemployment rate dropped more than a half percent over the last two months to 7.1 percent in December. “We are actually seeing private sector job growth in excess of the lost local government employment for 2011, and with net job growth outpacing the growth in the labor force for the year, the rate of unemployment has been falling,” said Theo. “If home sales are to continue to grow, we will need more robust job growth going forward, but a falling unemployment rate is a welcomed sign,” he said.

Another bright spot in the WRA’s report showed inventories of unsold homes dropped to 12.5 months of supply in December, which is the first time it has been below 13 months since the WRA began tracking inventory levels in May 2010. In addition, the Wisconsin Housing Affordability Index, which shows what percentage of a median-priced home a buyer with the median family income can afford, stood at 269 for December 2011, up from 230 in December 2010. “The Wisconsin housing market is still very much a buyer’s market, and the decline in median prices in December combined with 30-year mortgage rates below 4 percent has pushed affordability to very high levels, which is great news for buyers who qualify for mortgage credit,” said Theo.

The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 13,400 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 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 rebenchmarked using the Techmark system which accesses MLS data directly and in real time. The Wisconsin Housing Affordability Index is updated monthly with the most recent data on median housing prices, mortgage rates, and estimated median family income data for Wisconsin.