2011 March Homes Sales Report
Home Sales and Prices Fall in March
Date: April 18, 2011
MADISON, WI – Both existing home sales and median prices fell in March according to data just released by the Wisconsin REALTORS® Association (WRA). Sales of existing homes fell 18.5 percent in March compared to the same month last year. The median home price fell 9.6 percent to $123,000 over the same period.
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But REALTOR® experts caution comparisons to last year can be misleading because of the federal homebuyer tax credit, which was in effect in 2010 but is no longer available. “After solid sales in January this year the market has fallen sharply in February and March,” John Horning, Chairman of the WRA Board of Directors, said. “While disappointing, it’s important to remember that home sales in March of 2010 were not typical due to the impact of the federal homebuyer tax rebates.” Horning added program front-loaded sales into the first half of 2010 as buyers rushed to close before the program ended June 30. “The tax credit anomaly of 2010 will distort our 2011 sales and price numbers,” Horning noted. “We expect to return to a more reliable apples-to-apples comparison around the fourth quarter of this year.”
All regions in Wisconsin saw sales drop significantly in March 2011 compared to March 2010. The reductions were 12.8 percent in the south central region and between 16.4 and 18.9 percent in the southeast, northeast and north regions of the state. In the west, existing home sales dropped 28 percent over the period, with the most significant decline was seen in the central region, which slid 33.8 percent for the month. For the quarter, sales look better according to the REALTOR® report. “The decline in sales for February and March were preceded by strong sales in January, so the picture improves when viewed on a quarterly basis,” said Horning.
Median prices were down 9.6 percent statewide in March compared to March 2010; however prices in the northern region of the state actually increased 2.2 percent over the period. Two other regions had median prices fall by moderate margins, with prices dropping 3.0 percent in the south central region and 6.5 percent in the west region. Existing home prices dropped 11.2 percent in the northeast and down 13.7 percent in the southeast region. Finally, the central region dropped 18.1 percent over the period.
“We have to interpret these price changes with caution,” Bill Malkasian, WRA President, said. “Buyers were highly motivated last year to take advantage of the tax rebate and that urgency certainly influenced prices. The return to a normal spring pattern of sales, combined with nearly 15 months of inventory makes 2011 much more of a buyer’s market.”
Indeed, the Wisconsin REALTORS® Housing Affordability Index, which measures the percent of the median priced home that a buyer with the statewide median family income can purchase, stood at 244 in March, well above the 216 measure from last year. Both mortgage rates and household income levels were virtually unchanged from last March, so the boost in affordability comes from the decline in median prices over the period. “Our affordability continues to improve,” Malkasian said, noting other economic factors continue to provide positive signs for the housing market as well. “Wisconsin’s unemployment rate is down nearly two percent since peaking in the summer of 2009, and we have added more than 25,000 jobs over the last 15 months so while the growth is slow, the economy is improving,” Malkasian added. “As the economy continues to grow, we will eventually see upward pressure on both mortgage rates and home prices so this is a good time for credit-worthy buyers to get a lot of home for their money.”