Wisconsin Realtors Association: Wisconsin home sales and prices continue path of robust growth

For More Information Contact:
Michael Theo, WRA President & 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, Wis. – Wisconsin home sales and prices both grew in July, outpacing the solid rate established for the first half of 2013 according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes for July increased 17.3 percent over July of 2012, which is stronger than the 11.4 percent rate of growth established in the first six months of this year over the first half of last year. Home prices also continued their strong rate of appreciation, increasing 9.0 percent in July over last July, to a statewide median of $155,299. Prices for the first six months of the year were up 7.7 percent.

“It’s clear that 2013 is shaping up to be a very strong year for Wisconsin housing and the indications are that these trends will continue,” said Renny Diedrich, WRA board chairman. Diedrich pointed to recent signs of strengthening state economy, with improved unemployment and job growth rates. According to seasonally adjusted data reported by the U.S. Bureau of Labor Statistics, Wisconsin added over 24,000 nonfarm jobs between June of 2012 and June of 2013, which has led to a slight improvement in the unemployment rate to 6.8 percent in June of this year.

Existing home sales were strong throughout the state, with three of the six regions growing more than 19 percent in July compared to July of last year. The fastest growth was seen in the West region, which increased 25.8 percent over the period; followed by the Southeast, up 21 percent; and the South Central region, which grew 19.4 percent. Also up by solid margins were the Central region, up 11.9 percent; the North region, up 11.1 percent; and the Northeast, up 6.6 percent. “We’re at the peak of the Wisconsin home selling season, with nearly 43 percent of all sales taking place between May and August in a typical year,” said Diedrich. “As long as the state job market continues to improve, we expect the market in the second half of the year to mirror the strong performance we’ve seen in the first half,” she said.

Wisconsin median prices continued to rise as well, increasing 9 percent in July 2013 compared to July 2012. “This is very strong median price appreciation and it’s consistent with national trends,” said Michael Theo, WRA President and CEO. Theo said statistics from the National Association of REALTORS® show that the median sales price of single-family homes nationally increased 12.2 percent in the second quarter compared to the second quarter of 2012, which represents the strongest year-over-year increase since the fourth quarter of 2005. “Wisconsin’s second-quarter appreciation rate was more modest than the nation’s, but the trend of a tightening housing market is the same,” said Theo. Wisconsin’s median price rose 7.7 percent in the second quarter of 2013 relative to that same quarter last year. This has resulted in diminished affordability, with the state Housing Affordability Index standing at 220 in July compared to 241 for July 2012. The index gives the percent of the median-priced home that a buyer earning the estimated median family income can afford to buy, assuming current mortgage rates and a 20 percent down payment on that home. “This trend in declining affordability is primarily a consequence of rising home prices as well as a slight upward trend in mortgage rates,” said Theo. “Even though new listings have seen healthy increases, demand is very strong and hence our available inventories continue to decline,” said Theo. Months of supply are down 20.5 percent to 10.1 months in July 2013, compared to July of last year. “We expect this trend to continue throughout the rest of the year, so those considering getting into the housing market should move quickly,” said Theo. “Using an experienced REALTOR® who is familiar with local market conditions remains the best way to get the most bang for your buck,” he said.

The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 13,500 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 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 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. Data on state foreclosure activity is compiled by Dr. Russ Kashian at the University of Wisconsin–Whitewater.