October 2019 Home Sales Report Wisconsin Existing Home Market Remains Solid in October Date: November 18, 2019
MADISON, Wis. — The fourth
quarter opened with slight growth in home sales, even as median prices increased
at a robust pace, according to the most recent review of the state housing
market by the
Wisconsin REALTORS® Association (WRA). Closed sales of existing homes
increased 0.7 percent comparing sales in October 2019 with October 2018, and the
median price rose 7.3 percent to $195,900 over that same period. Comparing the first
10 months of 2019 to that same period last year reveals that home sales were
down just 1.5 percent whereas median prices rose 7.1 percent to $198,000 over
the period.
“In
contrast to last month where the growth in home sales was solid in every region
of the state, the sales picture in October was quite mixed,” said WRA Chairman Steve Beers.
Four regions saw sales grow over the last 12 months, with the Southeast and Central
regions up 5.7 percent and 5.2 percent, respectively. The West region grew 3.7
percent, and the Northeast region increased 3.0 percent between October 2018
and October 2019. In contrast, the North region fell 6 percent, and the South-Central
region dropped 9.6 percent over that same period.
“Inventory weakness continues to be the main driver in
this market, with nearly every part of the state considered a seller’s market,”
said Beers. Only the North region had more than six months of available supply.
Moreover, the inventory situation failed to improve in any region of the state
over the past year. Overall, there were just 4.6 months of statewide supply,
dropping slightly from the 4.7 months of supply in October of last year. The weakest
inventory was in the Southeast region with just 3.7 months of supply. Beers did
note that “REALTORS® are still moving a lot of homes, and they’re
moving them more quickly than last year.” The statewide average days on the
market fell 5.2 percent over the last 12 months to just 91 days in October.
“We’ve
got very favorable mortgage rates and a healthy state economy, but until we
break through on the supply side, sales will struggle to grow, and prices will
increase at a fast pace,” said WRA
President & CEO Michael Theo. The 30-year fixed-rate mortgage stood at 3.69
percent in October, which is only slightly higher than the all-time low of 3.35
percent in November and December 2012. The seasonally adjusted state
unemployment rate has inched up to 3.3 percent, after dropping to a record low 2.8
percent in April and May this year, but the state is still essentially at the
level economists consider full employment. “Plus, we’re still creating jobs,”
said Theo. Private sector jobs continue to grow despite losses in the manufacturing
sector. Total private non-farm employment grew by 17,200 jobs over the last 12
months, according to the Wisconsin Department of Workforce Development. “Strong
demand and weak supply force prices up, and that’s what we’ve been seeing all
year,” he said. Year to date, prices are up 7.1 percent, which far outpaces inflation.
“Unfortunately, new
construction hasn’t helped improve the supply problem,” said Theo. Through the
first three quarters of 2019, there were 7.3 percent fewer building permits
pulled for single unit homes compared to that same period in 2018. “The real key
to breaking out of this supply problem is to increase new listings, and these
have increased in each of the last two months,” said Theo. While new
construction is very important to the overall supply of homes on the market, so
too are existing homes for sale. The total number of new listings of existing
homes in October alone — which included 8,196 newly listed homes — approaches the
magnitude of the total number of permits pulled for single-family homes over
the first nine months of the year, which were 8,446 permits. “With new listings
up again, we may be seeing some initial signs that inventory will finally start
to improve,” said Theo. However, he noted that we are still in a strong
seller’s market. “Buyers need to be ready to move quickly in this market, and
that means getting their financing pre-approved as they work with a REALTOR®
who is experienced to find the right home,” he said.