For More Information Contact:
Michael Theo, WRA President & CEO, 608-241-2047, mtheo@wra.org
or
David Clark, Economist, C3 Statistical Solutions and Professor of Economics, Marquette University, 414-803-6537, dclark@c3stats.com
MADISON, WI – February marked the 20th straight month of double-digit growth in sales of existing homes in Wisconsin, with sales up 11.7 percent compared to February 2012. Median home prices also grew to $122,000 in February, which represents a solid 6.1 percent rate of growth compared to February last year, according to statistics released by the Wisconsin REALTORS® Association (WRA).
“There are strong seasonal patterns in Wisconsin home sales, and the vast majority of homes sell between April and September, but we’ve had a very good housing market over the past winter,” said Renny Diedrich, Chairman of the WRA board of directors. Specifically, comparing the most recent December, January and February sales figures to those same months a year earlier, home sales increased 14.5 percent. “The housing market has been on a strong growth path since the summer of 2011, and while the growth rate has moderated slightly, this is a very good trend moving into the spring selling season,” Diedrich said.
Five of the six regions in the state saw home sales rise in February. The Central region grew at a healthy 24.4 percent, and the Southeast and South central regions were up 15.5 percent and 11.9 percent, respectively. The West grew 9.2 percent, and the Northeast increased 8.9 percent compared to February 2012. The North region saw its home sales fall, but this represented a reduction of just 3 percent, or nine fewer sales in February 2013. “It’s important to note that the Central and North regions, which have sizeable second-home markets, are still running well ahead of last year’s pace for the winter selling season,” said Diedrich. Comparing the December through February months to those months a year earlier, existing home sales increased 17.5 percent in the North region and grew 19.7 percent in the Central region.
Median prices in the state rose a solid 6.1 percent in February relative to February 2012 and were up 6.7 percent over the most recent winter months compared to the previous December through February period. This is well above the rate of inflation, which has averaged between 1.7 and 2.2 percent over the last three months of 2012, and just 1.6 percent in January. “While we don’t think that housing prices will continue to grow at nearly three times the rate of inflation, it’s clear that the Wisconsin home market has been tightening, and housing is likely to be a good way to accumulate household wealth going forward,” said WRA president and CEO Michael Theo. Price appreciation was especially strong in the North and Central regions of the state, which saw median prices grow between 24.2 percent and 28.1 percent in February 2013 compared to February last year. Much of the price increase in these areas was due to a shift in the mix of homes to larger properties or those in more prime locations, but some likely reflects a tightening of the second-home markets in these areas. Median prices in the other regions were either flat, as in the Northeast; up by modest amounts, as in the Southeast; or up by solid margins, as in the South Central and the West.
Although state inventory levels increased slightly compared to last month, they are still 13.1 percent below the levels of February 2012. “We’ve seen a consistent pattern of declining inventories, and the state now has 8.6 months of supply,” said Theo. He noted that most of the metropolitan counties have inventory levels that are between five and seven months of supply. Still, housing affordability remains high. The Wisconsin Housing Affordability Index shows the percentage of a median-priced home that a buyer with the median family income can afford at current mortgage rates. The index was at 291 in
February 2013 compared to a modified 281 in February 2012. There has been a slight improvement in median family income, but the major reason for higher affordability is low mortgage rates, which are in the 3.7 percent range. “Still, with tightening inventories, housing prices should continue to rise, which will undoubtedly reduce affordability, so this is a great time to use an experienced REALTOR® to help identify the best value in this market,” said Theo.
The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 11,900 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.
