2013 August Home Sales Report
Hot Real Estate Market Continues in August
Date: September 23, 2013
MADISON, Wis. – Home sales and median prices both grew at a healthy pace in August, continuing the hot real estate market in Wisconsin, according to the most recent housing report from the Wisconsin REALTORS® Association (WRA). Existing home sales were up 13.7 percent in August compared to last August, closing out a very strong summer for home sales and 26 straight months of sales growth. Home prices showed similar strength with the median price rising 6.3 percent to $152,000 in August. Median prices have been up 17 of the last 18 months.
“This has been a very strong summer for home sales, which is important for a state like Wisconsin where there are strong seasonal sales patterns,” said Steve Lane, broker with First Weber Group REALTORS® in Stevens Point and the new Chairman of the WRA board of directors. He noted that in a typical year, about 42 percent of home sales in the state take place between May and August. “We started the year strong, and we’ve carried that momentum through the summer, which bodes well for the remainder of the year,” he said.
Existing home sales were up in every region of the state, with five of the six regions growing by 9.9 percent in August compared to August 2012. The area with the fastest growth over August 2012 was the Central region, which was up 23.2 percent. Also up by substantial margins were the South Central, increasing 18.4 percent, and the Southeast, growing 14.5 percent compared to August last year. The West was up 11.1 percent, and the Northeast grew 9.9 percent over the period. Finally, home sales in the North were up 5.6 percent compared to last year. “While it’s not uncommon to see some volatility in sales in the northern and central parts of the state due to the large number of second homes in those areas, the more urbanized regions are more stable and were consistently strong in August,” said Lane.
Wisconsin’s median home prices grew at a solid pace between August 2012 and August 2013, increasing 6.3 percent to $152,000. This continues a trend that began in March last year and mirrors national trends of rising home prices. “Our appreciating home values are due to a combination of moderate job growth, shrinking inventories and the fact that the there is less shadow inventory of potential foreclosures, which was depressing home prices in the immediate aftermath of the recession,” said Michael Theo, WRA President and CEO. On the job front, Wisconsin added 108,700 jobs since nonfarm employment bottomed out in February 2010, according to seasonally adjusted data reported by the U.S. Bureau of Labor Statistics. This job expansion includes employment growth of about 24,100 jobs since January 2013.
“While the most recent employment data are still preliminary and subject to revision, they do paint a positive picture of state job growth and suggest we’re moving in the right direction,” said Theo.
Statewide, there was 10 months of available inventory on the market in August, which is down from 12.4 months in August 2012. “Inventories are even lower in the urban areas, which has put upward pressure on prices in those cities,” Theo said. Inventories in the metropolitan counties are at just 7.5 months. “Finally, we’ve made real progress in liquidating foreclosed properties in the state,” he said. Through the first half of the year, Wisconsin foreclosures were down 37.2 percent compared to the first half of 2012.
The Wisconsin Housing Affordability Index, which stood at 215 in August, still indicates that housing remains affordable in the state. The index shows the percent of the median-priced home that a buyer earning the estimated median family income can afford to buy, assuming current mortgage rates and a 20 percent down payment for the home. “Although affordability has been trending downward as both prices and mortgage rates have increased faster than the growth in income, excellent opportunities remain in this market for credit worthy buyers,” said Theo. “An experienced REALTOR® is still the best way to find those bargains,” he said.