2011 January Home Sales Report
Home Sales Jump Significantly as Prices Moderate
Date: February 21, 2011
MADISON, WI – Home sales jumped significantly in January over last year according to a recent report by the Wisconsin REALTORS® Association (WRA). Wisconsin sales of existing homes were up 16.2 percent in January 2011 compared to that same month last year, and the median price in the state slipped 4.1 percent to $129,500.
“This is actually the second straight month in which home sales increased in the state, with sales growing over 4 percent in December and now up substantially in January,” said John Horning, Chairman of the WRA Board of Directors. “This is very good news for our housing market and a promising sign that we may be turning the corner in Wisconsin’s housing market – and unlike last year, we did it without the federal homebuyer tax credit,” said Horning.
Horning cautioned against drawing too many conclusions from just two months of sales performance, especially during the winter months when housing activity is routinely low. He noted that the strength of the housing recovery will be blurred over the next few months by the flurry of activity that occurred between March and June of last year as buyers were scrambling to meet the federal tax credit program deadlines. “We won’t be surprised if sales in the next few months don’t match 2010 levels, but the fact that we are seeing solid activity in the dead of winter without federal tax incentives is encouraging,” he said.
The expansion in sales activity in January was broad, with all regions seeing increases and four of the six regions up by double-digit percentages. “We saw exceptionally strong sales in regions with large second home markets, including a 33-percent increase in the north and a 25-percent increase in central Wisconsin,” said Horning.
The median price fell in January statewide but prices varied by regions. Prices fell between 6.8 and 8.5 percent in the northeast, southeast and western regions of the state, while prices increased in the north by 14.2 percent, in south central Wisconsin by 3.2 percent and in the central part of the state by 2.7 percent compared to January 2010.
While this is encouraging news, WRA President Bill Malkasian cautioned against overreacting to the strong sales figures, noting, “The federal tax incentives programs in effect in 2009 and 2010 are distorting the comparison of sales between past and present markets. What is undisputable, however, is the fact that housing affordability is strong in Wisconsin.” Malkasian added, “Inventories have been inching down over the past quarter. They are currently at 13.3 months, which is helping fuel a very strong buyer’s market.” The REALTORS® Housing Affordability Index, which shows what percentage of a median-priced home a buyer making the median-family income can afford in Wisconsin, was at 244 in January, which is substantially higher than in January 2010 when it stood at 216. “The combination of relatively low mortgage rates and moderating prices statewide makes this an excellent time for credit-worthy families to get a great deal on a home,” said Malkasian.