2013 January Home Sales Report
January Home Sales Robust as Median Prices Increase
Date: February 18, 2013MADISON, Wis.
– Although January is typically a slow month for home sales in Wisconsin, the 19-month trend of double-digit growth continued last month as existing homes sales grew 18.3 percent compared to January 2012. In addition, median home prices also increased 3.4 percent to $123,000 over that same period.
“The month of January is typically the low-water mark in terms of Wisconsin home sales volume,” said Renny Diedrich, Chairman of the WRA Board of Directors. She noted that January usually accounts for just under 5 percent of the annual sales of existing homes in the state. “To see existing home sales continue the strong pace established in 2012 bodes well for the spring when the market heats up,” said Diedrich.
All regions in the state were up in January. The strongest growth was seen in the North and Central regions, where sales grew at 31.6 and 28.2 percent respectively, as well as the West region, which was up 22.5 percent. “It’s interesting that the fastest-growing regions are areas with strong vacation home markets since these markets were especially hard hit during the recession,” said Diedrich. Also strong were the Southeast and South Central regions, where sales were up slightly less than 18 percent, and the Northeast region, which grew at a solid pace of 9.2 percent over the period.
“We have seen fairly consistent upward movements in median prices since last spring, and that trend continues as we move into 2013,” said WRA President and CEO, Michael Theo. Median prices rose just over 1 percent for all of 2012, and the median price appreciation over the last two months has been well above that pace. In fact, median prices have grown in 10 of the last 11 months, relative to the same month in the previous year. This trend is not surprising given that the state has seen a steady reduction in unsold inventory; 45,000 single-family units are available statewide, which represents 8.5 months of inventory. “We do think that inventories will stabilize in the six- to seven-month range as new home construction begins to pick up,” said Theo. The U.S. Bureau of the Census shows that Wisconsin single-family housing starts for 2012 increased 16 percent over the 2011 level.
“The good news is that even with minimal growth in family income over the past year, affordability remains high due primarily to very low mortgage rates,” said Theo. The Wisconsin Housing Affordability Index measures the percentage of a median-priced home that a buyer with the median family income can afford at current mortgage rates. The index jumped to 291 in January 2013 compared to a modified 269 in January 2012. With declining inventories putting modest upward pressure on prices, affordability will likely fall this year even if the Fed maintains mortgage rates in the range of 3.5 percent to 4 percent during 2013. Moreover, the state economy is showing some signs of improvement, with the seasonally adjusted unemployment rate holding steady at 6.6 percent during the last two months of 2012. This is well below the national rate that inched up to 7.9 percent in January. “The bottom line is that this is an excellent time to have an experienced REALTOR®
help you find the best values in this tightening housing market,” said Theo.