Report: Existing state home sales flat in September
Median prices ahead of last year’s pace

By Dwayne Butler - Freeman Staff

Oct. 21, 2014

MADISON - September single-family home sales in Wisconsin had flat numbers when compared with the same month in 2013, according to a state housing market report released Monday by the Wisconsin Realtors Association.

Existing home sales were behind by 0.2 percent and 3.4 percent through the first nine months of 2014 when compared with the same period in 2013.

A total of 6,145 homes were sold in Wisconsin in September 2014 compared with 6,130 in September 2013. Through the first three quarters of this year, 52,582 homes have been sold compared with 54,457 in the first nine months last year.

The Milwaukee region, which includes Milwaukee, Waukesha, Washington and Ozaukee counties, was one of the few in the state with positive numbers. The region had a slight increase of 1 percent in September home sales, but is behind 4.7 year-to-date.

Flat numbers aside, WRA Chairman Dan Kruse  believes the state real estate market is in good shape. He pointed out that while sales in the 2014 third quarter were 2.1 percent behind the third quarter last year, the WRA data shows a 20.7 improvement after the Great Recession ended in the third quarter of 2009.

“Although our home sales are slightly lower than last year, it’s important to recognize how far we’ve come since emerging from the Great Recession,” Kruse said. “To be only slightly lower than last year’s solid market suggests a relatively healthy market for housing in the state.”

Prices on the rise

Meanwhile, the state housing prices continue to increase, finishing September 2014 3.1 percent higher than September 2013, and 2.4 percent more through the first three quarters of this year.

The average median sales prices for September 2014 was $148,700. The average median price in the four-county Milwaukee region was $171,000, a 5.6 percent increase over September 2013. The state median price of $148,500 for the first nine months of the year is more than $3,000 ahead of last year’s. The Milwaukee region’s average price of $170,000 for the same period is 3 percent higher.

“Although we appear to be in a bit of a holding pattern in terms of existing home sales in the state, much like the rest of the U.S., median home prices have grown at a healthy sustainable pace this year,” WRA President & CEO Michael Theo said.

Seasonally adjusted housing inventories have ranged from about 49,000 homes to nearly 53,000 since December 2012, which the WRA said is a far cry from the nearly 72,000 homes on the market in March 2010.

In September 2014, Kruse said, there were 7.5 months of available inventory collectively in the 24 metropolitan counties compared with more than twice that level of 15.9 months in the state’s 48 rural counties.

“While overall inventories have come down, there continues to be tighter inventories in urban parts of the state compared to rural areas,” Kruse said.

Homes affordable

The Wisconsin Housing Affordability Index, which gives the percent of the median-priced home that a household with the median family income and a 20 percent down payment can afford to buy at current mortgage rates, ranged between 206 and 249 over the last 12 months, suggesting that the typical family can afford to buy between 2 and 2.5 times the median-priced home, the WRA reported.

The September 2014 index level stood at 222, which is slightly higher than the September 2013 level of 219.

“A modest improvement in the estimated median family income and a slight reduction in mortgage rates helped to keep affordability on par with last year, even as home prices rose,” Theo said.

Falling unemployment, according to the U.S. Bureau of Labor Statistics, is helping the real estate market as well.

“We’re seeing real job growth and hopefully this will translate into income growth for Wisconsin workers, both of which are needed to get home sales growing,” Theo said.