Wisconsin Housing Market Remains Solid in the Second Quarter of 2003

Date:  August 14, 2003

For More Information Contact: David E. Clark, Economist C3 Statistical Solutions Inc.
Office phone: 262-549-4992
Cell phone: 414-803-6537

Madison - Mortgage rates continued their record slide in the second quarter, helping to boost Wisconsin residential home sales by a healthy 4.5 percent, despite sluggish job growth in the state, according to the Wisconsin REALTORS® Association (WRA).

The latest REALTORS'® figures show a seasonally adjusted total of 28,975 homes sold in the state over the April-June 2003 period. This was slightly below the national pace of 5.8%, and also lower than the Midwest region, which experienced an 8.3% rate of growth over the same period.

"It's difficult to overstate the importance of these historically low interest rates on home sales during the second quarter," said Robert Weber, Chairman of the Board of the WRA. "Although the economy is officially in recovery, and has been since the fall of 2001, the labor market has been slow to recover." Weber noted statewide unemployment rates continue to hover in the 5.5 - 5.6% range. "This reinforces the importance of low mortgage rates in the housing market."

The 30-year fixed rate mortgage rate fell to 5.2% in June, before moving up recently. While upward movement in interest rates are common when the economy expands, Weber said, "We will be watching the labor market figures very carefully in the next several months for signs of a strengthening economy, especially if mortgage markets continue to rise."

Multiple Listing Service (MLS) data for Wisconsin counties shows that all areas of the state grew over their second quarter levels last year with the growth especially strong in the Central and Northern parts of the state. The strongest regional growth occurred in Central Wisconsin, where homes sales advanced 13.4%. Although sales in Adams County doubled, this was based on very low volume. The growth was especially strong in Marathon County, the largest county in the region, where sales were up 24.1% over their second quarter (Q2) 2002 levels. Second quarter growth was also strong in Portage county, which increased 13.6%, whereas the expansion in Wood county was more modest (3.7%) and it was nearly unchanged in Waushara (+1.6%). Only Clark County experienced a decline, falling 44% on moderate volume.

Also experiencing double-digit growth was the North region, which grew 10% in Q2 2003 over Q2 2002. However, there was substantial volatility in the region. The sales volume doubled in Price County, albeit on relatively low Q2 2002 volume. However, it was up nearly 50% in Oneida (+49.1%) and Rusk (48.3%) counties. Nearly as strong was Polk county (+42.6%), which is outside of Minneapolis and also Ashland and Bayfield counties, which are combined in these figures, grew 38.7% as compared to Q2 2002. Iron County was unchanged from its 2002 volume. In contrast, the remaining counties in the region experienced slight to substantial declines. Specifically, both Vilas (-1.4%) and Langlade (-2.3%) were only slightly off their Q2 2002 pace, whereas Barron County fell 6.5%. A number of counties saw declines in the 11% - 18% range; Specifically, Washburn (-11.1%), Sawyer (-12.8%), Douglas (-13.3%) and Burnett
(-17.4%) Counties. Finally, Lincoln County slid 27.5% on modest volume.

Sales volume was up 8.2% in the Northeast region in Q2 2003 as compared to the same quarter last year. The existing home sales nearly doubled in Kewaunee County (+85%), although the volume remained below 40 total units. However, several larger counties also experienced substantial increases in sales activity. These include the counties of Door (+44.4%), and Green Lake (+32.8%). Also in double-digits were Calumet (+19.6%), Winnebago (+11.9%) and Marinette (+11.8%) counties. Waupaca County grew 7.5% compared to Q2 2002, whereas Outagamie County increased +5%, and Brown County advanced 4%. Fond du Lac maintained the levels recorded in Q2 2002, whereas Shawano slipped slightly (-1%) and Oconto county (-10.9%) fell more substantially.

Nearly as strong was the growth in the West region, which was up 7.7% in Q2 2003. The combination of Buffalo, Pepin and Trempealeau counties were up 34.5% on moderate volume, and St. Croix county (a western suburb of Minneapolis) remained very strong with total sales up 27.7% compared to the second quarter 2002. Chippewa County was also quite strong (+22.8%) and LaCrosse County (+9.2%) recorded solid growth as well. Sales did decline in several counties. Specifically, Dunn county was barely off its' Q2 2002 pace (-1.8%); Pierce fell by 5.2%, and Eau Claire county declined 7.8% on relatively high volumes.

Two of the more urbanized regions in the state rose more moderately. It should be noted that both of these areas have experienced solid sales volume in recent years, thereby creating a significant base on which the growth is evaluated. The South Central region increased 5.6% in Q2 2003 as compared to Q2 2002 with the strongest growth recorded in Jefferson county (+32.5%) which continues its robust growth rate. Also strong were Dodge (+18.3%), Columbia (+14.5%) and Rock (9.4%) counties. Dane county was essentially flat (+0.9%) as was Sauk County (-1%). The only county to experience a double-digit decline was Green County (-10.3%).

Finally, the Southeast region grew 3% in the second quarter of this year over Q2 2002. Kenosha County continued to experience strong existing home sales growth (+14.8%), as did Walworth County (+13.9%). Also healthy was Sheboygan County, which grew at 8.7%. Racine County was unchanged, and the Milwaukee metropolitan area was essentially flat (+0.7%). However, within the metro area, Milwaukee County increased 3.9% and Ozaukee County grew at 2.3%. This was offset by a slight decline in Waukesha County (-2.1%) and a more substantial slide in Washington County (-10.9%).

Sales

Home prices in the second quarter of the year continued to grow, easily keeping pace with inflation in the economy. The median home price in Wisconsin was $143,600, up 6.9% compared to Q2 2002. "In this period of stock market uncertainty, housing remains a solid asset and a great way to accumulate wealth," said WRA President Bill Malkasian. "Even though housing has appreciated at a healthy pace, housing in the state remains affordable," he stated. "However, it's important for local governments to hold the line on property taxes, since growing tax burdens will certainly reduce the affordability of housing to the middle-class," warned Malkasian.

Median housing price appreciation for the various regions in the state varied between 3.2% and 10.7%. As was the case in the first quarter of this year, the West region again experienced the strongest regional appreciation rate in the state. The region experienced a 10.7% growth in median prices to $138,700. With the exception of Pierce County, which fell slightly (-1.4% to $164,400), the remaining counties monitored by WRA had their median prices rise. Dunn County was up substantially (+14.4% to $130,800) as was LaCrosse County, which rose 12.9% to $124,200 on solid volume for the quarter. Eau Claire County rose 10.9% to $121,300 and St. Croix County also increased by double-digits (+10.2% to $187,300). The existing home prices in Buffalo, Trempealeau and Pepin counties, which are combined in this analysis, rose 7.2% to $95,000, and Chippewa county which experienced a very strong increase in sales volume also experienced solid median price appreciation (+6.8%) to $102,500.

The median prices in the Northern Wisconsin region rose nearly as quickly as the West, with prices up 10% to $130,000. This was a solid increase, especially given that the sales volume for the region during the second quarter was also higher by 10%. Focusing on those counties with at least 10 home sales in both Q2 2002 and Q2 2003, median prices appreciation was strongest in Washburn county (+42% to $149,100), but prices also rose sharply in Sawyer (+31.3% to $157,500), and Barron (+29% to $113,300) counties. Median price growth in the most recent quarter was also robust in Lincoln county (+13.7% to $98,000), Polk county (+10.3% to $150,000) and Burnett county (+10.2% to $146,300). Oneida County rose 6.1% to $140,000 on sales volume that nearly doubled in Q2 2003 over Q2 2002, whereas prices remained unchanged in Iron County at $110,000. Median prices did fall in several counties including Langlade county (-11.7% to $70,000), and substantial reductions in Price (-33.5% to $81,200), Ashland/Bayfield (-34.6% to $85,000), and Rusk (-46.3% to $63,300). While it is likely that the mix of homes shifted in the counties that experienced substantial price reductions, these figures are probably also reflective of some discounting on homes.

The Southeast region experienced median price appreciation of 7.7% to $152,700 with most counties experiencing growing median prices over the Q2 2002 to Q2 2003 period. Median prices were up over 10% in three counties; Kenosha (+11.2% to $144,600), Milwaukee (+11.3% to $130,600), and Waukesha (+10.6% to $219,400). Walworth county saw median prices rise 7% to $151,400; Racine was up 5.6% to $130,000; Washington county median prices increased 4.2% to $171,200; and Sheboygan county prices rose 2.4% to $116,000. Only Ozaukee County failed to show growth in its median price, and the reduction was less than 1% (-0.6% to $216,700).

Median price appreciation in the South Central region also exceeded 7% (+7.1% to $157,100) with the strongest median price growth in Rock County (+9.9% to $113,700). This represents a solid rebound for the county, given that its median prices were flat in the first quarter of this year. Almost as strong was Dane county, which had median prices increase 9.1% to $181,400. Dodge county was also up by a solid margin (+6.3% to $121,300). Comparing Q2 2003 with Q2 2002 revealed slight median price increases, in Sauk (+1.7% to $129,300), Green (1.6% to $117,900), Columbia (+1.4% to $132,900) and Jefferson (1.1% to $139,000) counties.

Prices appeared to be more volatile in the Northeast, which grew regionwide by 3.8% to $124,600. Median price growth in Q2 2003 as compared to Q2 2002, increased substantially in Door county (+39.4% to $180,000). One must be careful in the interpretation of this increase since a change in the mix of home sales between coastal homes and those on the interior of the peninsula could swing the median prices substantially. Waupaca county experienced solid price growth (+17.2% to $108,600), as did Brown county (+9.6% to $142,500) and Oconto county (+9.4% to $113,300). Median prices in the second quarter 2003, as compared to the same quarter last year, rose 7.1% to $97,500 in Shawano, and they increased 4.4% to $153,300 in Calumet County. Prices were up only slightly (+1.4% to $124,600) in Outagamie County, and they were down slightly in Fond du Lac (-1.5% to $102,400), Winnebago (-2.7% to $110,600) and Green Lake (-4.7% to $98,900) counties. More substantial adjustments were seen in Marinette (-10.2% to $64,500) and Kewaunee (-21.2% to $105,000).

Finally, the median prices in the Central region appreciated 3.2% to $105,000. The strongest growth rate was for Clark County (+31% to $90,000), whereas Waushara was up 10.3% to $102,500; Wood County increased 5.7% to $83,700; and Portage prices appreciated 2.1% to $114,100. In contrast, Marathon County experienced a reduction in median prices of approximately 4.5% to $109,500.

Median Housing Price

The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 12,000 real estate brokers, sales people and affiliates statewide. Sales estimates for the state are provided by the National Association of REALTORS® which seasonally adjusts quarterly sales figures. All county figures on sales volume and median prices are compiled by the Wisconsin REALTORS® Association and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter.

Wisconsin Housing Statistics Online

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