February 2019 Home Sales Report
February Sales and Home Prices Increase as Inventories Remain Tight
Date: March 17, 2019
MADISON, Wis. — Sales of existing homes in
Wisconsin were up in February despite escalating prices and winter
weather, according to the most recent analysis of the state housing
market by the Wisconsin REALTORS® Association (WRA).
Home sales rose 1.2 percent in February relative to that same month
in 2018, but median prices continued to increase as well, rising
6.1 percent to $175,000 over that same period.
"We actually set a new sales record for February," said Jean
Stefaniak, WRA chairman. Existing home sales surpassed the previous
sales record established last February, but given the relatively
weaker showing in January, sales for the first two months of the
year are still 3.4 percent below the pace set last year. "We had an
excellent winter last year, so being close to that mark is a
promising signal as we move into the spring and summer home
markets," said Stefaniak. The state typically sells just 5.1
percent of its annual volume in the month of February, compared to
more than double that percent in the peak selling months of May
through August.
"Inventory continues to be a significant challenge for the
state," said Stefaniak. Months of housing supply for sale fell 10.3
percent over the past year, slipping from 3.9 months in February
2018 to 3.5 months this past February. Every region of the state
saw its inventories fall, with most falling by double
digits.
Inventories differ significantly geographically with supplies
tighter in urban areas. In the 26 counties classified as
"metropolitan counties," which are defined by the U.S. Census as
belonging to a city of at least 50,000 people, there were just 2.9
months of housing supply in February. In the 14 counties with
medium-sized cities and towns classified as "micropolitan
counties," defined by the Census as having populations between
10,000-49,999, there were 4.1 months of housing supply. Finally,
the remaining 32 counties in the state, classified as "rural
counties," had 6 months of housing supply. "While it's good to see
many clear options for buyers in the rural markets, the reality is
most Wisconsinites live in the more urbanized counties where
inventories remain very tight," said Stefaniak.
"The overall economy remains strong with low unemployment, solid
job growth and favorable mortgage rates, which bolster demand,"
said WRA President & CEO Michael Theo. "Strong demand and
limited supply create upward pressure on home prices," Theo said.
But despite median prices up 6.1 percent on an annual basis in
February, affordability only suffered slightly. The Wisconsin
Affordability Index shows the fraction of the median-priced home
that a buyer with median family income can afford to buy, assuming
20 percent down and the remaining 80 percent balance financed with
a 30-year fixed-rate mortgage. The index was at 221 in February,
down from 228 a year earlier. "The recent improvement in mortgage
rates has helped with rates falling a half percent since October,"
said Theo.
"Given the tight inventory levels that prevail in most areas of
the state, it's important that buyers be ready to move quickly when
the right opportunity arises," said Theo, who noted it's critical
for buyers to have their financing lined up. "Sellers definitely
have the advantage in this market, so coming in with a clean offer
and working with a REALTOR® who is experienced is
still the key to success in this market," he said.
Metropolitan counties include Brown, Calumet, Chippewa,
Columbia, Dane, Douglas, Eau Claire, Fond du Lac, Green, Iowa,
Kenosha, Kewaunee, La Crosse, Marathon, Milwaukee, Oconto, Ozaukee,
Outagamie, Pierce, Racine, Rock, Sheboygan, St. Croix, Washington,
Waukesha and Winnebago. Micropolitan counties include Dodge, Dunn,
Florence, Grant, Jefferson, Lincoln, Manitowoc, Marinette,
Menominee, Portage, Sauk, Shawano, Walworth and Wood.