2010 October Home Sales Report
Home Sales Fall in October but Prices Are Stable
Date: November 22, 2010
MADISON, WI – Home sales in Wisconsin fell in October but prices remained stable, according to the Wisconsin REALTORS® Association (WRA). So far this year, sales of existing homes were down 6.9 percent with median prices down just 0.9 percent since January.
Comparing October 2010 to October 2009, home sales were down 36.3 percent but median prices remained unchanged at $140,000.
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“The market continues to experience distortions created by the two separate federal home buyer tax credit programs,” said John Horning, Chairman of the WRA Board of Directors. “Last October the market saw an inflated number of buyers who were trying to take advantage of the first tax credit program which was due to expire at the end of November. That inflated last October’s sales and makes this October look particularly weak by comparison,” said Horning. “We may have to wait another year before normal sales patterns return, allowing us to have truly valid monthly sales comparisons.”
Despite the fact that the recession has been officially over since last summer, there remains a great deal of uncertainty in the economy, leaving consumers, businesses and lenders skittish about the future, according to the WRA. The recently concluded elections only added to the uncertainty, according to Horning. “With the mid-term elections now behind us, we will hopefully get some clarity over the future course of the economy,” said Horning, noting Wall Street responded positively to the election results. “What we need now is job growth,” Horning said. “With modest gains of almost 28,000 new jobs in the state since the beginning of the year, including about 7600 manufacturing jobs, we hope this signals stronger economic growth in the near future.”
The statewide inventory of homes spiked to 15.3 months, largely as a result of the large decline in home sales in October. “With inventories up, this is a very good market for buyers who can qualify for a mortgage,” said WRA President Bill Malkasian. “With 30 year fixed rate mortgages at 4.23 percent, rates have never been more favorable, and with stable prices, housing affordability continues to be extremely high,” said Malkasian. The WRA’s new monthly Housing Affordability Index measures how much of a median priced home a buyer with the Wisconsin median family income can afford. “Our housing affordability index is currently at 210, up slightly from October of 2009,” Malkasian said. “This means a Wisconsin family with the median state income and 20 percent down payment can afford to buy 210 percent of the median priced home, making Wisconsin housing very affordable when compared to national benchmarks,” noted Malkasian.