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Wisconsin Housing Market Has Another Record Quarter
Date: May 27, 2005 (revised)
For More Information Contact: David E. Clark, Economist
C3 Statistical Solutions Inc.
Office phone: 262-549-4992
Cell phone: 414-803-6537
Madison - The Wisconsin residential home sales market
remained on a record pace according to the most recent analysis
by the Wisconsin REALTORS® Association (WRA). Statewide, homes
sales increased 3.1 percent over the level established in the
first quarter of 2004, setting a Wisconsin first quarter record
of 29,450 home sales. Nationally, home sales were up by 8.3
percent for the quarter, and the Midwest region saw home sales
rise 6.3 percent as compared to the first quarter of 2004.
"Housing sales in 2005 are starting out where 2004 left off -
in record-setting territory," said WRA Chairman Kitty Jedwabny.
"There are many factors that contribute to this excellent
market, not the least of which is the continued low mortgage
rates and solid labor market. The 30-year fixed rate mortgage
averaged 5.8 percent for the quarter, and the state continued to
add jobs in the quarter," she said. "Specifically, comparing the
first quarter of this year with the first quarter of last year,
the state created about 26,000 additional jobs, including 3,600
manufacturing jobs," said Jedwabny.
First Quarter Regional Sales Data
Sales figures for the first quarter were up in five of the
six regions of the state, based on Multiple Listing Service
(MLS) data for Wisconsin counties, and the growth rate for Q1
2005 over Q1 2004. Specifically, sales volume in the Northern
part of the state was up substantially (+24.8 percent), followed
by solid growth in the Central region (+10 percent). The more
urban regions of the state also experienced solid growth with
the South Central region up 6.8 percent, the Southeast region
increasing 5.3 percent, and the Northeast region increasing 4.9
percent. Only the Western region experienced a reduction in
sales volume (-9 percent over the period), due primarily to
reductions in sales volume in some of the larger counties.
The Northern region of the state experienced very strong
sales volume, increasing 24.8 percent in Q1 2005 as compared to
Q1 2004. Within the region, there was substantial variability in
the sales figures. The strongest sales growth was in Forest
County, where sales volume more than tripled, although this is
on relatively small volume (i.e., sales increased from six to 20
units). However, there were numerous counties that grew
substantially on relatively stronger volumes. Specifically,
Vilas County was up 101.4 percent, Langlade County grew by 90.9
percent, Oneida County increased 86.8 percent, and Price County
grew by 58.6 percent, all on initial volume that was in
double-digits. Several counties increased more moderately when
comparing the first quarter of 2005 with the same quarter last
year, including Burnett County (+14.3 percent) Lincoln County
(+13.9 percent) and Ashland and Bayfield counties (+9.5
percent), which are combined for reporting purposes. Barron
County remained unchanged, whereas a number of counties
experienced reductions in sales volume. These included Polk
County (-8.6 percent), Rusk County (-18.2 percent), Washburn
County (-36.8 percent), Douglas County (-41.7 percent albeit on
low initial volume), Sawyer County (-45.6 percent), and Taylor
County (-55.6 percent, again on relatively low initial volume).
The Central region of the state grew at a robust 10 percent
in Q1 2005 as compared to Q1 2004. The strongest growth was seen
in Clark County (+66.7 percent), although this growth is based
on a relatively small initial base. However, the growth in sales
was also strong in Waushara County (+18.6 percent) and Wood
County (+18.3 percent), both of which grew on a larger base.
This was followed by Marathon County (+11.5 percent), which is
the most populous county in the region. Sales were down slightly
in Portage County (-1.8 percent), and they fell more
significantly in two smaller counties (Adams County was down
58.6 percent from 12 units in Q1 2004 to five units in the most
recent quarter, and Juneau County sales dropped 100 percent from
two units sold in Q1 2004).
The South Central region grew at a solid 6.8 percent in the
first quarter of 2005 as compared to the first quarter of 2004.
Within the region, sales were strongest in Jefferson County,
with volume up 25.6 percent. It should be noted that Jefferson
County is situated between the western suburbs of the Milwaukee
metropolitan area and the eastern suburbs of the Madison area,
and hence it may be receiving spillover buyers from both
metropolitan areas. Also strong was Rock County, which grew 14.5
percent. Dane County was up 6.5 percent, whereas both Dodge
(+0.9 percent) and Green (0 percent) were essentially unchanged
over the period. Finally, two counties actually saw their sales
volume decline. Sauk County fell 7 percent and Columbia County
slid 9.2 percent.
The Southeast region of the state continued to grow at a
healthy 5.3 percent pace in the first quarter of 2005 as
compared to the same quarter last year. Sales were strongest in
Sheboygan County, where existing home sales grew at a robust
19.5 percent. Also strong were Waukesha and Walworth counties,
both of which were up 9.2 percent over the period, followed by
Washington County, which was up 7.5 percent. Milwaukee County,
which is the largest county in the state, grew at a solid 6.4
percent. Ozaukee County experienced growth of 1.7 percent,
whereas Racine County fell slightly (-1.6 percent) and Kenosha
County was down more significantly (-6.6 percent).
The volume of existing home sales in the Northeast region of
the state grew 4.9 percent over the Q1 2004 to Q1 2005 period.
Again, there was significant variability within the region.
Although Menominee County grew 600 percent, this only
represented an increase of six units sold to seven total.
However, Oconto County increased 55 percent, Shawano was up 40
percent, Door County grew 35.5 percent, Waupaca County grew 26.1
percent, Manitowoc County advanced 23.2 percent, and Marinette
County grew 23.2 percent. Much more moderate growth was seen in
Fond du Lac (+3.8 percent) and Brown (+3.6 percent) counties,
whereas sales reductions were recorded in the counties of
Calumet (-8 percent), and Winnebago (-10.7 percent). Even more
substantial declines were seen in Kewaunee County (-29.4
percent) and Green Lake County (which slid 29.7 percent over the
period).
The only region to experience a reduction in sales volume was
the West, which declined 9 percent in the first quarter of 2005
as compared to the first quarter of 2004. Again, performance
within the region was mixed. For example, the two eastern
counties around Minneapolis grew at a solid pace. St. Croix
County was up 23.4 percent and Pierce County grew 6.2 percent
over the period. LaCrosse County was also up slightly (+3.5
percent), but several counties in the region fell, with some
declines substantial. Existing home sales dropped 9.9 percent in
Dunn County; they fell 22.9 percent in the combined counties of
Buffalo, Pepin and Trempealeau; and they slid 35.3 percent in
Eau Claire County and 35.7 percent in Chippewa County.
First Quarter Median Housing Price Data
Home prices in the first quarter of the year also
experienced significant growth according to the WRA's report. As
compared to Q1 2004, median home prices were up 10.3 percent to
$152,700, with five of the six regions enjoying price growth.
"This market continues to reveal solid price appreciation," said
WRA President William Malkasian. "This remarkable market
continues to outpace inflation, which reinforces the belief that
real estate is one of the best ways to build household wealth,"
Malkasian added.
Median housing prices rose in five of the six regions of the
state when comparing Q1 2005 with the same quarter last year.
Median home price appreciation was up 14.1 percent in the West,
and it was nearly as high (+12.4 percent) in the Southeast
region. Also strong was the South Central region, which advanced
8.7 percent over Q1 2004, followed by the Northeast and Central
regions, which grew at 6.8 percent and 3.1 percent respectively.
Only the Northern region experienced a decline, falling 10.6
percent.
Median prices grew 14.1 percent in the Western region of the
state to $151,700. The strongest growth was in the combined
Buffalo/Pepin/Trempealeau counties where median prices were up
39.6 percent to $115,000. Interestingly, this county experienced
a substantial reduction in sales volume, suggesting that the
price increases may have dampened housing demand in the region.
Also up was LaCrosse County (+14 percent to $133,300) and St.
Croix County (+14.4 percent to $204,500). The increase in St.
Croix County accompanied a very strong increase in sales,
suggesting that strong demand is fueling the housing market in
that county. The other counties experienced more moderate median
price appreciation, or a slight decline in the median price.
Specifically, home sale prices were up 3.8 percent to $178,900
in Pierce County and 1.8 percent to $109,200 in Chippewa County,
while prices declined slightly (-1.5 percent to $122,500) in Eau
Claire County.
The Southeast region saw median housing prices rise 12.4
percent to $165,500 in the first quarter of 2005 as compared to
Q1 2004. All counties experienced housing price appreciation,
with Milwaukee County up 16.8 percent to $144,300. This was
followed closely by Walworth County, which was up 15.9 percent
to $173,800. It should be noted that both Milwaukee and Walworth
counties experienced solid growth in sales volume, suggesting
that demand is expanding faster than supply in those areas. A
county with a similar pattern of rising sale prices coinciding
with strong increases in sales volume was Sheboygan County,
which experienced a 7.3 percent rise in median prices to
$126,200. In contrast, the two counties in the region that
experienced reductions in sales volume saw their prices rise
substantially. Specifically, median prices grew 9.2 percent to
$152,900 in Kenosha County and they increased 8.4 percent to
$140,000 in Racine County. This may be an indication that higher
prices have begun to put some downward pressure on home sales in
those two counties. Median prices in Waukesha County rose 4.4
percent to $234,800, which put the county at the top of the
state in terms of price levels. Washington County prices
increased 3.9 percent to $195,600, and Ozaukee County
experienced median price appreciation of 1.9 percent to
$227,800.
The South Central region experienced an increase in median
prices in Q1 2005 as compared to Q1 2004 of 8.7 percent to
$170,000. Prices rose 13.5 percent to $156,400 in Columbia
County. Since sales volume was down by double digits in that
county over the period, this suggests that these price increases
may have weakened demand in the county. Also strong was Green
County, where median prices rose 13 percent to $125,900, and
Sauk County, where they rose 10.6 percent to $150,000. Solid
median price appreciation was seen in Dane County (+7.1 percent
to $200,000) and also in Rock County (+6.3 percent to $112,900).
Since both of these counties also experienced solid increases in
sales volume over the period, this suggests strong housing
demand in those areas. The prices in Jefferson County were up
1.9 percent to $152,000 on very strong growth in volume,
suggesting that Jefferson County remains an affordable
alternative to the higher priced houses in Dane County to the
west and Waukesha County to the east. The only county to
experience a reduction in the median price over the period was
Dodge County, where prices fell 5.2 percent to $112,700.
The Northeast region of the state had median prices rise 6.8
percent to $130,000 in the first quarter of 2005 as compared to
the first quarter of 2004. Price appreciation was especially
strong in Waupaca County (+26.7 percent to $113,300) even as
sales volume in that county rose 26.1 percent. Demand for
housing is outstripping the available supply in that county,
which is putting strong upward pressure on prices. A similar,
although less extreme picture is seen in Manitowoc County, where
sales were up 11.3 percent to $94,300 and the number of homes
increased by 26.4 percent in the first quarter. Median prices
were up 15.6 percent to $130,000 in Kewaunee County and they
also rose at a solid pace in the three relatively large
metropolitan counties. Brown County increased 9.1 percent to
$149,300; Fond du Lac County grew 7.2 percent to $105,700; and
Outagamie County rose 6 percent to $138,600. Marinette County
grew 3.6 percent to $69,300, whereas Shawano County increased at
that same rate to $91,200. Calumet County increased 1.5 percent
to $155,600. However, several counties experienced sales price
reductions. Specifically, median prices in Winnebago County
dropped 1.2 percent to $120,000, Door County fell 6.9% to
$194,300 and Oconto County's median prices fell 11.5 percent to
$115,000. Median price reductions were even more substantial in
Green Lake County (-25.2 percent to $93,300). It should be noted
that such dramatic price reductions likely reflect the fact that
the homes that sold in those counties in Q1 2005 were
qualitatively different on average from those that sold in Q1
2004 (e.g., the Q1 2005 homes may be smaller, or in less
desirable locations).
Median prices in the Central region were up 3.1 percent to
$108,300 from Q1 2004 to Q1 2005. Leading the region in median
price appreciation was Clark County, where prices rose 30.8
percent to $85,000. Given that Clark County also saw a
relatively steep increase in sales volume, this suggests that
demand is strong in the county. A similar picture of solid price
appreciation and strong sales volume is seen in Wood County,
where prices rose 11.1 percent to $88,900. Median prices
increased 7.7 percent to $122,600, and they were essentially
flat in Marathon County (-0.1 percent to $118,500). However,
median prices actually fell 5 percent in Waushara County to
$86,200.
The only region to experience a median price reduction from
Q1 2004 to Q1 2005 was the Northern region, where median prices
fell 10.6 percent to $105,700. The experience within the region
was highly variable. For example, median prices rose 19.2
percent to $155,000 in Polk County, which is an eastern suburban
county of Minneapolis, although this price increase appears to
have dampened housing demand in the first quarter (-8.6
percent). In contrast, median prices in Burnett County grew 12.5
percent to $130,000 even as volume grew 14.3 percent, suggesting
strong demand conditions in the county. Moderate price growth
was seen in Sawyer County (+2.9 percent to $154,300) and Lincoln
County (+1.2 percent to $86,000), and prices were up slightly in
Barron County (+0.8 percent to $108,600) and unchanged in Rusk
County at $70,000. Median prices fell slightly in Price County
(-2.5 percent to $73,100) and they fell moderately in Oneida
County (-5.6 percent to $113,300). The reduction in Washburn
County was 8.4 percent to $113,300, but it was substantial in
three counties in the region. Specifically, median sale prices
fell 30.6 percent to $60,000 in Langlade County; they slid 39.3
percent to $113,300 in Vilas County; and they dropped 41.5
percent to $87,800 in the combined Ashland and Bayfield
counties. While sales volume was up substantially in Langlade
and Vilas counties, it is unlikely that these median price
reductions resulted from significant discounting in the area.
Rather, it is almost certainly the case that the homes that sold
in Q1 2005 were qualitatively different from those that sold in
Q1 2004. Indeed, some REALTORS® have suggested that the
increased volume may be attributed to substantial interest in
second homes among winter tourists this year. Furthermore, they
suggest that those tourists were more likely to buy properties
that were "off the beaten path" and away from the more expensive
waterfront areas that have characterized sales in earlier years.
The Wisconsin REALTORS® Association (WRA) is one of the
largest trade associations in the state, representing more than
17,000 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 WRA and are not seasonally
adjusted. Median prices are only computed if the County recorded
at least 10 home sales in the quarter.
Q1 comparison from 2004 and 2005 Spreadsheet
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