State November home sales behind as median prices continue climb

By Dwayne Butler - Freeman Staff

Nov. 6, 2014

WAUKESHA - Existing home sales in Wisconsin were behind in November compared with the same month last year, but home prices increased over the same period, according to an analysis of the state's housing market by the Wisconsin Realtors Association.

Existing home sales in November were behind 6 percent, whereas median prices rose 6.6 percent to $145,000 between November 2013 and November 2014.

"The last couple of months have been a bit of a rollercoaster in terms of sales. October sales were up over last year but sales in November were down," said Dan Kruse, the chairman of the WRA board of directors.

The WRA reported that October sales rose 658 units compared with October 2013, while November home sales were behind 288 units relative to November 2013, All state regions had increased sales in October, and then moved in the opposite direction in November, with every region having decreased sales compared with the same month last year, the report said.

"Putting these numbers into perspective, our housing market remains strong in Wisconsin. We had the strongest September to November sales period since 2006, before the Great Recession began," said Kruse, noting that in a typical year, November accounts for only about 7 percent of total annual sales.

In November 2014, most regions were behind between 3 and 6 percent from the same month a year ago, with the smallest decline seen in the South Central region (down 2.9 percent). A slightly higher reduction was home sales in the Southeast region, at 3.8 percent. That region includes Milwaukee, Ozaukee, Waukesha and Washington counties.

The Northeast region was behind 12.3 percent versus the same month a year ago.


Prices higher

The median price of a Wisconsin home was 6.6 percent higher compared with November last year, which was the largest increase since February of this year, when the median price rose 7.4 percent.

Waukesha County prices were 11.5 percent higher than in November 2013, and Milwaukee County was 23.1 percent higher.

"Throughout most of the year, housing prices have grown at just over the rate of inflation, so hopefully this spike is just an aberration," WRA President and CEO Michael Theo said.

The WRA pointed out that for most months this year, the median price increases ranged between 1.3 percent and 4.2 percent compared with the same month in 2013. By comparison, the annual inflation rates were between 1.1 percent and 2.1 percent for each of the first 11 months of 2014, it said.

"Housing is an asset that has gained value in Wisconsin for 32 of the last 33 months, yet it remains affordable for those with solid credit who qualify for a mortgage," Theo said.


Affordability stays strong

The Wisconsin Housing Affordability Index remains high at 230, the WRA said, indicating a household with median family income can afford to purchase 230 percent of the median-priced home assuming they had a 20 percent down payment and they took out a 30-year fixed rate mortgage at current rates.

The index is very similar to the level of last year, due to modest estimated gains in median family income, and a slight reduction in mortgage rates, the WRA said.

The state currently has 8.4 months of unsold inventory, given the current annual pace of sales. On a seasonal basis, inventories tend to be highest in the summer months and then shrink through the fall and winter, bottoming out in January. The inventory reduction, however, should not put undue upward pressure on home prices, according to the WRA.