Home Sales Set Record In 2003

Date:  February 17, 2004

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

Madison - Wisconsin home sales set an all-time record high in 2003 with an estimated 119,000 homes sold, according to the Wisconsin Realtors Association (WRA). Persistently low interest rates throughout the year are credited with Wisconsin's historic housing market in 2003 according to WRA Chairman of the Board, Walter "Corky" Hellyer.

"These remarkable sales numbers are good news for Wisconsin's housing industry and economy but they're great news for the thousands of Wisconsin families that are enjoying their new homes this year," said Hellyer. Hellyer says the outlook for the housing market in Wisconsin for 2004 remains excellent.

The sales record set in 2003 occurred despite sales moderating in the fourth quarter. A seasonally adjusted total of 30,250 homes were sold in the state between October and December of 2003. "While the growth rate was just 0.4% when compared to the fourth quarter of 2002, we need to remember that the fourth quarter of 2002 was a record quarter as well," noted Hellyer. "Thus, even if home sales leveled off, they did so at a very high level."

Crediting low interest rates for the robust housing sales, the Realtors said thirty year fixed-rate mortgages were below 6% throughout the fourth quarter, and they have only increased about 50 basis points from their low point in June of 2003. "It's hard to overstate the role low interest rates play in creating this favorable housing market," said Hellyer.

Fourth Quarter Sales Data

The growth rate in existing home sales in Wisconsin compares with a somewhat stronger rate in the Midwest (+5.2%) and an even stronger rate for the nation as a whole (+9.3%). It should be noted that although most states experienced growth in the 4th quarter of 2003 as compared to the same quarter last year, there was considerable variability from state to state.

With the exception of the South Central region of the state which was flat, all other regions experienced slow to moderate growth in existing home sales for the fourth quarter. The fastest growing region was the West which grew at 7.1% in Q4 2003 as compared to the Q4 2002. Several counties in the region experienced substantial growth over the period. For example, home sales in Buffalo county were up 60% although this growth rate is on a modest level of volume. In addition, Dunn county grew by 38.2% and Chippewa county advanced 29%, both on somewhat higher volumes than Buffalo county. Continued strong growth was experienced in the eastern counties around Minneapolis, where sales were up 9.7% in St. Croix county, and they increased 4.5% in Pierce county. Growth in Eau Claire county was flat at 0.3%, maintained the solid level of sales established in Q4 2002. The only county experiencing decline was LaCrosse county which fell 9.5% over the period.

Also strong was the Northern region which increased 6.8%. Comparing Q4 2003 with the same quarter in the previous year, there were numerous counties that grew very quickly. For example, Taylor county grew at a phenomenal 467%, but this is based on an original volume of just 3 sales in Q4 2002. However, four counties experienced double-digit growth, on solid sales volume in the last quarter of 2002. Specifically, Washburn county advanced 69.8%, Rusk county increased 41.7%, Burnett county was up 33.3%, Polk county increased 32.4% and Sawyer county grew at 19%. Also experiencing solid growth over their Q4 2002 levels were Iron (+9.5%), Vilas (+7.8%), Barron (+6.1%) and Oneida (+4%) counties. Douglas county was unchanged from its Q4 2002 levels, and there were a number of counties that contracted from those levels, although none of these counties had more than 75 home sales in that quarter. Specifically, Forest was down 10%; Ashland and Bayfield counties which are combined for reporting purposes were off their Q4 2002 pace by 12.5%; Langlade county fell 30.5%; Lincoln county declined 41.1% and Price county was off by 47.5%.

Existing home sales were up 4.9% in the Central region. Compared to Q4 2002, sales in the fourth quarter of 2003 more than doubled in Clark county (+120%) on low volume and they increased 21.1% in Waushara county. Portage county was up 7.9% and Wood county advanced 4.3% for the quarter. The largest county in the region is Marathon, and it simply maintained its high Q4 2002 levels. Only Adams county experienced a decline (-71.4%), and this was on relative low sales volume in the previous year (i.e., only 14 sales in Q4 2002).

Home sales grew at 2.5% in the Northeast region with sales in several counties up substantially and others off their Q4 2002 pace. Specifically, Oconto county was up 41% in Q4 2003 as compared to Q4 2002. Likewise, Door and Kewaunee counties which are combined for reporting purposes were also up substantially, increasing 25.9%. Also experiencing double-digit growth was Shawano county (+13.3%), Marinette county (+13.1%), and one of the largest counties in the region, Winnebago county (+11.1%). Fond du Lac county grew at 4.3% in the fourth quarter, and Brown county was flat (+0.5%) as compared to Q4 2002. In contrast, Outagamie county fell 9.4%, Waupaca county was down 16.7%, Green Lake and Menominee counties declined 20% and Calumet county was down 22.9% compared to the last quarter of 2002.

The Southeast region of the state also experienced slight growth in the fourth quarter of 2003, with sales up 1.1% over Q4 2002. The strongest county is Sheboygan which grew 18%. Also showing solid growth were Milwaukee county (+6.1%), Walworth county (+4.2%) and Kenosha county (+4.0%). However, several counties experienced a reduction in volume from the high sales levels set in Q4 2002. These include Washington county which fell 2.6%, Racine county which was down 7.1%, Waukesha county declined 8.1% and Ozaukee county which slid 12.1%.

Only the South Central region recorded no growth over its Q4 2002 levels, remaining virtually unchanged from last year (-0.2%). We emphasize that maintaining the Q4 2002 levels still represents a very solid housing market for this most recent quarter. Nonetheless, most counties still experienced growth over the period. For example, Jefferson county continues to grow at a robust pace, increasing 22.7% in Q4 2003 over the fourth quarter last year. Columbia county also experienced solid growth (+11.3%), with more modest growth seen in Sauk county (+3.4%). Dodge county was essentially unchanged (0.7%) in its sales volume, and Dane county slipped slightly (-2.1%). Rock county fell more substantially (-7.1%), and Green county fell by more than twice that pace (-15.3%).

Sales

Fourth Quarter Median Price Data

Home prices increased at a modest pace in the fourth quarter, according to WRA President Bill Malkasian, who noted the median housing price in Wisconsin rose 3.4% to $140,000 when compared to Q4 2002. "All regions experienced appreciation of median home sale prices," said Malkasian. "While appreciation rates have cooled a little from those experienced in the past few years, we do not think that depreciation is likely in the foreseeable future" he said. Malkasian further pointed out that the economy continues to improve and he is hopeful that job growth will accelerate in 2004. In addition, "Mortgage rates remain at very favorable levels, and the Federal Reserve typically avoids changing interest rates during presidential campaigns. All of these factors suggest a continued solid housing market in the state in 2004" he said.

Turning to individual regions in the state, median housing prices rose between 2.8% and 9.4% in the fourth quarter of 2003 as compared that same quarter last year. The strongest appreciation rate was found in the Northern region of the state, with median sales prices rising 9.4% to $133,300. Within the region, there were three counties that experienced very strong appreciation in Q4 2003 over Q4 2002. They include Iron county (+76.9% to $190,000); the combined Ashland/Bayfield counties (+60% to $160,000), and Rusk county (+43.1% to $75,000). It should be noted that these increases are based on sales volumes in the 34 and below range in both quarters for each of these counties. Hence, it may be the case that the median priced homes that sold in 2003 were larger than those that sold in Q4 2002 in these counties. However, three counties that were somewhat larger in size also experienced strong median price appreciation rates. Specifically, median prices rose 35.4% to $154,300 in Sawyer county; they grew 20.6% to $205,000 in Vilas county and they increased 15.6% to $142,500 in Washburn county. Several counties experienced more moderate growth in median prices including the counties of Oneida (+5.2% to $144,000), Barron (+3.8% to $118,700) and Burnett (+2.6% to $145,000). In contrast, median prices fell slightly in several counties including Polk county which declined 3.4% to $140,000 and Lincoln county which dropped 5.5% to $83,700. More sizeable reductions were seen in Douglas county (-7.1% to $130,000) and Langlade county (-9.7% to $68,600). Finally, median prices slid 19.3% to $68,000 in Price county the final quarter of 2003 as compare to Q4 2002.

The next strongest region in terms of median home price appreciation was the South Central region where median prices rose 7.2% to $160,000 in the fourth quarter of 2003 as compared to that same quarter in 2002. Within the region, all counties for which data were provided, reported median prices rising between 5.3% and 9.7% in Q4 2003. Individually, the strongest median price growth rate was in Columbia county (+9.7% to $146,200) followed closely by Sauk (+9.3% to $130,000) and Jefferson (+8.6% to $141,200) counties. The remaining counties were also quite solid in terms of growth of median prices, with Dodge county up 7.7% to $108,900; Rock county increasing 7.4% to $108,700; Dane county up 5.6% to $190,000; and Green county growing 5.3% to $116,500.

The Northeast region experienced appreciation of median prices of 6.4% to $124,600 in Q4 2003 as compared to Q4 2002. Two counties grew at very healthy rates, with median prices up 45.7% to $131,100 in Oconto county and 32.7% to $116,000 in Shawano county. Interestingly, both of these counties also experienced a solid increase in home sales in Q4 2003 as compared to the same quarter in 2002. Median prices were up 7.7% to $106,700 in Green Lake county, and they increased by nearly as much in three of the more urban counties in the region (i.e., Brown county was up +7.3% to $138,700; Winnebago county increased 6.6% to $118,700; and Outagamie median prices grew 5.9% to $127,100). Also experiencing higher median prices was Marinette county which grew 4.5% to $70,000. There were several counties in the region that experienced modest declines in median prices, although all median price reductions were smaller than 6%. Specifically, Fond du Lac fell 3.2% to $97,900; Waupaca declined by 4.1% to $97,000; Calumet was off its Q4 2002 median price levels by 5.2% to $147,700; and median home sale prices fell 5.9% to $138,000 in the combined Door/Kewaunee counties.

Median prices grew nearly as quickly in the Western region (+6.1% to $140,000) comparing Q4 2003 to Q4 2002. Within the region, two counties experienced rates of growth in median prices exceeding 20% for the quarter. Buffalo county grew 24.4% to $101,900 and Dunn county's median prices increased 20.7% to $138,800. More modest growth rates were seen in Eau Claire (+4.7% to $121,700) and St. Croix (4.3% to $181,800) counties. The other counties changed very little. Specifically, LaCrosse rose slightly (+0.4% to $114,100), whereas median prices fell 0.6% to $110,000 in Chippewa county and they dropped just 1.2% to $168,000 in Pierce county.

The Central region had its median prices advance 3.7% to $106,700 in the last quarter of 2004 as compared to the last quarter of 2002. Two counties experienced substantial increases with Clark county up 19.9% to $83,900 and the much larger Marathon county up 10.3% to $122,100. The remaining three counties with complete data for both quarters showed minor changes in median prices. Portage county median price appreciation was 2.4% to $114,300; Waushara county was essentially flat (-0.6% to $109,300) and Wood county fell by slightly more (-1.6% to $81,200).

Finally, median prices in Q4 2003 were slightly higher than their levels in Q4 2002 in the Southeast region, with prices rising 2.8% to $152,000. Three counties experienced strong median price appreciation rates in the 9.3%-10% range. These include Ozaukee county (+10% to $220,000), Racine county (+9.9% to 127,700) and Washington county (+9.3% to $176,900). Four other counties saw their prices rise between 4.2% and 5.9%. These include Waukesha county which experienced median price growth 5.9% to $225,000, followed closely by Walworth county (+5.7% to $152,900), Kenosha county (+4.5% to $143,100) and Milwaukee county which had its median prices increase 4.2% to $125,000. Only Sheboygan county failed to show a solid growth in median housing prices (+0.3% to $116,900).

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 volume estimates for the state are provided by the National Association of REALTORS® which seasonally adjusts its quarterly sales figures. All county figures on sales volume and all median price figures for the state and the individual counties are compiled by the Wisconsin REALTORS® Association and are not seasonally adjusted.