Cold, snow impact state home sales in February
Price climb, growing interest rates also contribute to 10.1% decline

By Dwayne Butler - Freeman Staff

March 18, 2014

This house, at 812 E. Broadway in Waukesha, is listed for $169,900.
Cold and snow slowed home sales in February.

Charles Auer/Freeman Staff

WAUKESHA - The bitter cold temperatures and record snowfall across Wisconsin impacted the real estate market in February.

For the second straight month, home sales dropped as Wisconsin recorded its coldest winter in decades, according to an analysis of the housing market activity released by the Wisconsin Realtors Association on Monday.

Existing home sales dropped 10.1 percent when compared with February 2013. Another contributing factor was the 7.4-percent price increase over the same 12-month period.

Historically, February accounts for just 5.6 percent of total annual sales in a normal year, whereas a typical summer month accounts for between 10.2 percent and 11.5 percent of annual sales, according to the WRA.

“We live in Wisconsin. We expect slow sales in February," WRA Board of Directors Chairman Steve Lane said in a statement. “But we broke many records for cold temperatures this winter, so it’s not surprising this year’s February sales were off the 2013 pace,” he said.

Home sales dropped in every part of the state, with the South Central, Central and Northeast regions down between 5.2 percent and 9 percent in February versus the same month last year. The West region was down 11 percent.

The Southeast region, which includes Waukesha and Milwaukee counties, as well as six other counties, dropped 12 percent.

The North region was especially hard hit, with a reduction of 16.3 percent.

“The decline in sales in the North is certainly understandable given their snow totals and bitter cold temperatures this year,” Lane said.
 

Other key factors

The nasty weather wasn't the only factor in the sales decline. Median prices reached $130,000 in February and interest rates continue to inch forward, the WRA reported.

A year ago, the average price of a home in Wisconsin was $121,000. Meanwhile, the average rate for a 30-year fixed mortgage was 4.28 percent, according to bankrate.com. A 15-year rate stood at 3.32 percent.

“Median prices have grown consistently since March of 2012 and mortgage interest rates have been climbing and are now almost a full percentage point higher than this time last year,” Lane said.

The median price has increased in all but one month over the last two years, the WRA said.

“It’s good to see prices growing, but we hope to see a moderation in the rate of median price appreciation,” WRA President and CEO Michael Theo said in a statement.

Theo did point out that although the increase in median prices was very similar to the 7.2 percent increase for all of 2013, the fourth quarter of 2013 saw a median price increase of 5.7 percent and January median prices rose just 2.4 percent relative to January 2013.

Housing remains affordable despite the recent price increases, according to the February Housing Affordability Index, which shows the percent of the median-priced home that the household with median family income can afford to buy assuming that borrower has a 20 percent down payment and is financing at current mortgage rates.

The February index stood at 245 in February, which the WRA said still indicate strong affordability. A year ago in February, the index stood at a peak level of 294.

Email: dbutler@conleynet.com