2010 Year End Home Sales Report
Home Sales Decline in 2010 but Prices Remain Stable
Date: January 17, 2011
MADISON, WI – Home sales were down but prices were stable in 2010, according to a new year-end report by the Wisconsin REALTORS® Association (WRA). Sales of existing homes for 2010 were 7.5 percent below 2009, but the median home price of $141,000 for 2010 was just 1.1 percent below the previous year, according to the report.
The housing market in the first half of 2010 was very different from the second half of the year, according to the REALTORS® report. More than 56 percent of home purchases during the year occurred in the first six months, according to John Horning, Chairman of the WRA Board of Directors. “We saw far more sales activity than is typical in the first half of the year, which is directly related to the federal homebuyer tax credit program that was originally set to expire in June,” Horning said. As a result, buyers rushed to close before the June deadline, which essentially borrowed sales from the latter half of the year. “Not surprisingly, sales dropped off sharply in July and stayed at these depressed levels for the remainder of the year,” said Horning.
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Every region across the state, except the North Wisconsin region, experienced a drop in home sales. In northern Wisconsin, existing home sales in 2010 actually increased 4.6 percent over 2009. Rural areas of the state fared better than urban regions, with Central Wisconsin sales dropping just 2.6 percent compared to sales in the Southeast region, which fell 11 percent. The Northeast and West regions both fell in the range of 6.6 to 6.7 percent, and sales were down 9.1 percent in the South Central region. In contrast, the modest drop in median home prices was much more uniform across regions, with most regions dropping 2.5 percent or less. The two exceptions are the Central region where prices fell 4.3 percent, and the North region where they increased 3.9 percent.
Looking ahead, Horning said the state unemployment rate is the key to home sales in 2011, noting the November 2010 unemployment rate was 7.6 percent, more than a percent lower than the beginning of that year, and more than two percent lower than the national rate for that month. “Wisconsin added over 41,500 jobs since January 2010, including over 13,000 jobs in the relatively high-paying manufacturing sector. We need for this momentum in job creation to continue if the state’s housing market is to fully recover,” Horning said.
The inventory on the market also dropped for the second straight months, according to the WRA report, falling in December to a 13.8-month supply. “These inventories have kept Wisconsin housing very affordable, presenting excellent opportunities for buyers,” said WRA President Bill Malkasian. He noted that the Wisconsin Housing Affordability Index, which shows what percentage of a median priced home a buyer with the median family income can afford, stood at 230 for December - up 16 points from December of 2009. “Although mortgage rates have increased about half a percent since hitting bottom last October, they remain below 5 percent,” he said. “A growing economy, favorable interest rates and healthy inventories form a good foundation for continued housing market improvement for 2011 and beyond,” said Malkasian.