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 – Wisconsin’s housing market rebounded in 2012, with sales of existing home sales up substantially and median prices up modestly, according to the latest figures released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes for 2012 were 20.7 percent above the levels of 2011, and the statewide median price increased 1.1 percent to $133,500 over that same period.
“We’ve seen very strong growth in home sales for the last year and a half, which is an indication that buyers perceive the value of investing in housing again,” said Renny Diedrich, Chairman of the WRA Board of Directors. She noted that robust growth in home sales was seen throughout the state, with every region growing by double digits. Four of the six regions saw home sales grow by more than 20 percent over the past year. Specifically, sales were up 23.1 percent in the Central region and grew 22.8 percent in the Southeast, which is the most populous region. Home sales in 2012 grew 21.9 percent in the South Central region, and they were up over 2011 levels by 21.2 percent in the Northeast. Finally, sales were up 17.7 percent in the North region and increased 13.3 percent in the West. “As we know, the economic downturn in 2007 was precipitated in large part by problems in the housing sector, so we’re hopeful that this growth, which mirrors national trends, will help strengthen the economic recovery,” said Diedrich.
“Median prices have increased in eight of the last nine months, ending the year up 1.1 percent, which is a welcomed sign,” said WRA President and CEO, Michael Theo. Even though Wisconsin avoided the substantial price bubble seen in places like Arizona, California, Nevada and Florida, Theo noted that the recession did pull home prices down in the state as foreclosure activity and inventory levels both trended upward. “We’ve now reversed those trends, which has stabilized our home prices in 2012,” said Theo. Statewide, foreclosure activity peaked in 2009 with more than 28,500 unique cases of foreclosure, and that number fell to just under 23,000 unique cases in 2012. “The decline in foreclosure activity has helped bring our statewide inventories down to 8.9 months in December 2012, which is well below the 12.5 months that existed this time last year,” said Theo. He noted that the number of unsold homes in December also dropped 6.1 percent since November to just over 46,000.
The upward trend in median prices, including a substantial one-month increase of 10.4 percent in December 2012 relative to December 2011, did not dampen affordability, due primarily to very low mortgage rates. “With 30-year conventional mortgage rates at 3.35 percent and a slight increase in estimated median family income, housing in Wisconsin remained very affordable in December,” said Theo. The Wisconsin Housing Affordability Index, which measures the percentage of a median-priced home that a buyer with the median family income can afford, stood at 269 in December 2012.
“Assuming that the economic problems in Europe as well as the unresolved budget issues at the federal level don’t lead to recession, we expect continued growth in sales and modest price appreciation over the next year,” said Theo, who noted that there is pent-up demand among those who have been waiting for the housing market to bottom out. It is clear that there was solid improvement in home sales in 2012. “The slight upward movement in median home prices in 2012 will likely get some potential buyers off the fence in 2013, but the key to ongoing growth in housing is sustained employment growth in the state, which has been anemic at best this past year,” he said.
The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 10,500 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.
