Wisconsin Housing Market on Record Pace in Q3 2003

Date:  November 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 - The national economy grew at the strongest rate in 19 years in the third quarter of 2003, and the housing market appears to have followed suit, recording phenomenal growth when compared to the third quarter in 2002. Existing home sales grew at 12.4% in Wisconsin, according to recently released figures from the Wisconsin REALTORS Association (WRA). The latest REALTORS' figures show a seasonally adjusted total of 30,850 homes sold in the state over the July through September 2003 period. The strong showing in the state compares to even stronger growth for the nation as a whole, which grew by 18.7%, and also the Midwest, which grew nearly as fast (+17.1%) in the third quarter.

"The good news on the economic front appears to have given a strong boost to the housing market," said Walter Hellyer, Chairman of the Board of the WRA. While job growth has been lackluster since the economy officially moved into recovery at the end of 2001, 30-year fixed-rate mortgages hit 5.2% in June and then began inching upward slightly. "The uptick in mortgage rates, combined with the arrival of the federal tax rebate checks may have gotten some people, who were considering a home purchase, off the fence" said Hellyer. Although the growth in the national economy is not likely to continue at its torrid third quarter pace, the general economic indicators remain quite strong, and this bodes well for the future of the housing market.

Sales Volume Growth

Multiple Listing Service (MLS) data for Wisconsin counties shows that all areas of the state grew over their third quarter levels last year with the strongest growth by far in the Western region of the state, which saw home sales up 31.3%. Home sales grew at an astounding 56.8% in St. Croix county on solid sales volume. Indeed, St. Croix has routinely been the fastest growing county in the state in recent quarters. The growth was almost as rapid in Dunn county which increased 49.4%, whereas Chippewa county was up 25%. Also strong were Buffalo, Pepin, Trempeleau counties which are combined for reporting purposes (+38.7%) as well as Pierce county (+24.2%) and LaCrosse county which was up by 23.3% over Q3 2002. Eau Claire lagged the region, but still grew 15.7%.

The Northern region of the state was up by 19% in the third quarter 2003 as compared to the same quarter last year. However, there was considerable volatility in the region. Both Taylor and Washburn counties more than doubled in volume, and while the former still has just under 20 home sales, Washburn increased 137.2% to over 100 homes sold. Up by more than 50% were Price (+57.1%), Rusk (+54.8%), Iron (+53.3%) and Polk (+51.4%) counties. Also experiencing double-digit growth in the quarter were Lincoln county (+31.3%) and Barron county (+25.6%). Oneida county is one of the larger counties in the region, and its sales were up 9.3%, and Vilas county which is also relatively large had home sales increase 4.6%. Burnett county was up just 1.7% whereas several counties experienced declines. These include the counties of Langlade (-8.9%) and Sawyer (-14.2%). Furthermore, Bayfield county, which is combined with Ashland county for reporting purposes, slid 20.5%, and Forest county fell -36.4%. Note that most of the counties that experienced negative growth, are relatively small in terms of unit volume.

Three regions grew in the 11.6% - 12.7% range. Topping the list is the South Central region which increased 12.7% overall, when we compare Q3 2003 with Q3 2002. Most counties in the region experienced solid growth. Rock county grew by 32.5% whereas Sauk county advanced 27.2% and Columbia county was up 23.2% over the third quarter 2002. Dodge county advanced 11.9%, and Jefferson county continued its pattern of solid growth, registering 9.4% more sales this quarter than the same quarter last year. Dane county, which is the largest county in the region, grew by nearly 6%, whereas Green county was basically flat (-1%) for the quarter.

The Central region grew 12.6% in Q3 2003 over Q3 2002. The strongest growth rates were in relatively smaller counties (Clark +50%) and Adams (+26.7%), but the largest county in the region was also up significantly. Specifically, Marathon county was up 20.1% over last year. Solid growth was also seen in Wood county (+8.1%), and Portage county (+5.1%). Waushara was unchanged from Q3 2002.

The Southeast, which is the most populated region in the state, experienced very solid growth of 11.6% in the third quarter 2003, as compared to that same quarter last year. Most counties were in double-digits, including those in the Milwaukee metropolitan area. Specificallly, Waukesha county was up 17.1%; Washington county increased by16.3%, Ozaukee county grew 15%, and Milwaukee county was up 11.6%. Walworth county also experienced very robust growth (+14.2%), with slightly more modest increases found in Racine (+7%) and Kenosha (+6.8%) counties. Only Sheboygan county was flat (-0.8%).

Finally, the Northeast region experienced the slowest growth, but it still increased 5.4%. Note that the growth rate is derived from the sales volumes of counties that reported in both Q3 2002 and Q3 2003. Although some counties in the region experienced very strong growth, others declined over the period. The strongest growth in the region was in Fon du Lac county which increased 27.3% on solid sales volume. Up by nearly as much was Shawano county (+23.3%) followed by a strong showing in the counties of Brown (+14.4%), Waupaca (+13.5%), Oconto (+12.1%) and Green Lake (+10.4%). Two counties were up modestly (Calumet increased +5% and Outagamie advanced +3.4%). Door county, whose volume was reported with Kewanee county, declined slightly (-2.3%), and surprisingly, Winnebago county fell 17.5% in Q3 2003 as compared to the same quarter last year, on relatively large sales volume.
 

Sales

The median home price in the state was $147,300 in the third quarter of the year, which represents an increase of 6.4% over the same quarter last year. "This pattern of increasing home values was spread throughout the state with all but one region up by at least 6% over last year" said WRA President Bill Malkasian. "This strong appreciation, when combined with the tax benefits of homeownership, makes housing an ideal hedge against inflation. We are hopeful that this positive trend will continue as the economy continues to strengthen." he stated.

Median housing price appreciation for the various regions in the state varied between 3.4% and 9%. As was the case in the first two quarters of this year, the West region again experienced the strongest regional appreciation rate in the state. The region's median prices grew 9% to $145,700. The highest growth was in the combined Buffalo/Pepin/Trempeleau counties, where median prices increased 34.3% to $103,300. Dunn county prices increased 18.8% to $131,700. Solid price appreciation rates were found in LaCrosse county which increased 8.8% to $126,700 followed by Eau Claire (+5.7% to $128,000) and Pierce (+4.9% to $166,200) counties. Median prices in the other two counties reporting activity were essentially flat (St. Croix was up 1.1% to $178,800; Chippewa increased 0.5% to $117,500).

The Southeastern region of the state also experienced solid appreciation of median prices, with prices increasing 7.6% to $154,500 when comparing the third quarter of 2003 with the same quarter in 2002. Two counties saw prices rise over 9% (Walworth county grew 9.7% to $158,300 and median prices were up 9.4% to $181,800 in Washington county). Both Racine and Waukesha counties experienced an 8.4% increase in their median prices with prices rising to $132,300 in Racine and $222,500 in Waukesha. Milwaukee county was up 7.6% to $130,600 and they were up 4.4% to $141,800 in Kenosha county. Prices rose 2.5% to $120,000 in Sheboygan county. The only county that did not register an increase in median prices was Ozaukee county, which fell 0.3% to $226,700.

As compared to the second quarter in the Northeast, where prices were somewhat volatile, median prices grew by a solid 7.1% to $130,000 in the third quarter 2003 as compared to Q3 2002. The county experiencing the strongest median price growth was Waupaca, which increased 13.4% to $107,700. Nearly as strong was Green Lake, which increased 10.5% to $113,300. The combination of Door and Kewaunee counties saw prices grow 9.5% to $143,300. Several counties experienced growth in the 7% range. Specifically, Shawano had median sales prices increase 7.4% to $96,700; Brown county was up 7.1% to $142,700 and Winnebago increased 7.1% to $117,800. Median prices in Q3 2003 as compared to Q3 2002, increased by a solid margin in Fon du Lac (+5.4% to $121,200) and Calumet (+3.5% to $151,300) counties. Two counties saw their median prices decline. Specifically Outagamie county witnessed a price reduction of 4.4% to $125,000, and Oconto county experienced a price decline of 7% to $94,300.

The median prices in the Central Wisconsin region rose nearly as quickly as the Northeast, with appreciation of 6.7% to $113,300. However, there was considerable volatility within the region. Whereas median prices in Waushara county were up 27% to $114,300, and they rose 9.4% to $121,200 in Portage county, prices increased 3.5% to $118,700 in Marathon county, and they were virtually unchanged (+0.7%) in Wood county at $86,200. Furthermore, two counties experienced significant price reductions (-15.4% to $110,000 in Clark county; and -33.6% to $95,000 in Adams county). Note that these latter two counties had sales of less than 25 homes in both Q3 2002 and Q3 2003.

Median prices in the South Central region grew at a rate of 6% to $161,400. Green county, which experience no increase in volume, saw its median prices rise sharply (18.7% to $126,700) in Q3 2003 as compared to the same quarter a year ago. Likewise, median prices were higher by considerable margins in Sauk (+11.7% to $138,500), Rock (+9.3% to $113,300) and Columbia (+8% to $142,900) counties. Dane county prices rose 5% to $186,200 and they increased only modestly in Jefferson county (+1.8% to $137,100) and in Dodge county (+1.5% to $113,300).

Finally, median prices rose just 3.4% in the Northern region, to $137,800. However, there was substantial variability within the region, with some counties experiencing price increases in excess of 40% and others seeing median prices fall more than 25%. Comparing Q3 2003 with Q2 2002, median prices rose 43.4% in Iron county to $150,000, and they increased 37.2% to $154,300 in Douglas county. Very strong price appreciation was also found in Barron County (+17.7% to $123,100) as well as Ashland/Bayfield (+16.9% to $136,900) and Burnett (+12.7% to $154,500) counties. Nearly as strong was Vilas county which experienced median price growth of 9.3% to $182,200. Polk county median prices increased 6.5% to $148,000 and they were nearly unchanged in Oneida county (+1.2% to $146,700) and Rusk county (-1.4% to $85,000). However, substantial price reductions were found in several counties including Langlade (-10% to $85,000), Washburn (-11.2% to $170,000), Price (-16.8% to $80,000), Sawyer (-19.3% to $142,000) and Lincoln (-26.7% to $85,000). Thus, it appears that there is likely some discounting of home prices that led to the strong sales growth in the Northern region for the quarter.

Median Price Appreciation

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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