With a strong September, the Wisconsin housing market finished the third quarter well ahead of the 2014 pace, according to the most recent analysis of existing home sales by the Wisconsin
REALTORS® Association (WRA).
September 2015 home sales were 11.1 percent higher than September 2014, and the median price rose 4.3 percent to $155,375 over that same period. Comparing the first nine months of 2015 with the same nine months in 2014, home sales rose 12.6 percent whereas the median price increased 5.7 percent to $157,000.
Last month in Pierce County the media price of a home was $148,000, up one percent from a year ago. Sales were also up, 14.7 percent to 54 from 47 in September 2014.
“It was a great summer for home sales, and we seem to be carrying that momentum into the fall selling season,” said K.C. Maurer, WRA board chairman.
Maurer noted that even though the sales volume in the fall is lower than the summer, the three months between September and November still typically account for about 24 percent of home sales in the state. Existing home sales were strong in every region of the state in September, with especially robust sales in the North, up 17.9 percent; the Central region, up 14.2 percent; and the Northeast, up 13.6 percent. Also solid were the remaining three regions, with the Southeast up 11 percent relative to September last year, the West growing 7.1 percent, and the South Central region increasing 5.4 percent over that period.
“This is shaping up to be a very good year if sales continue at this rate,” said Maurer.
Specifically, if the pace of sales established in the first nine months of 2015 continues through the end of this year, annual sales will likely be in the range of 75,000 homes statewide. The last time Wisconsin home sales exceeded that level was 2005 when just over 78,000 homes were sold.
The median price of existing homes sold increased 4.3 percent over the September 2014 to September 2015 period, which is significant considering that the market has seen virtually no inflation throughout all of 2015.
“This is of course excellent news for homeowners who have seen the asset value of their homes continue to rise over the last several years” said WRA President and CEO Michael Theo.
Median prices have increased on an annual basis for 41 of the last 43 months. Theo pointed out that the tightening inventories will continue to put pressure on home prices in the state.
“New listings are down, as are inventory levels especially in our urban counties,” he said.
Although there is currently 13.4 months of unsold inventory available in rural counties, the metropolitan counties in the state have just six months of available supply. The good news is that the Wisconsin labor market is improving with the state unemployment rate falling to 4.3 percent in September. In addition, mortgage rates remain low by historical standards. The 30-year conventional mortgage rate was just 3.89 percent in September, which is about a quarter point lower than this time last year. Both of these developments help to keep affordability at high levels even as median prices rise. The Wisconsin Housing Affordability Index shows the portion of the median-priced home that a household with median family income can qualify to purchase, assuming a 20 percent down payment and the remainder of the principle financed with a 30-year fixed-rate mortgage. The index stood at 229 in September, which is essentially unchanged from the previous year.
“The absence of inflation has kept the Fed from raising rates, but when they do start tightening the money supply, mortgage rate increases will likely follow,” said Theo. “This is definitely an excellent time to move to homeownership while housing remains affordable,” he said.