Year End 2010 - Home Sales Decline in 2010 but Prices Remain

As an "old dawg" real estate agent what are my thoughts about the current state of the Wisconsin real estate market? The market is cetainly a bit "pale" if we use the comparison 
of  the markets we enjoyed the past 5 or 10 years. But if we look at recent home sales numbers released by the Wisconsin realtors Association (the WRA) for factual information, their year end report perhaps puts thiongs in perspective. In Wisconsin, we fortunately are not seeing market tanking and prices plummeting in a free fall as they are in some other areas.  Home sales in the state were 7.5 percent below 2009, but the median home price of $141,000 was just 1.1 percent lower than that of the previous year, according to the report.


There was a marked difference between the first half of 2009 compared  to the second half of the year. More than 56 percent of the home purchases occurred in the first six months. That increased activity was largely due to thefederal homebuyer tax credit program. So in effect, buyers anxious to capture that credit borrowed from last half of 2010, and that dramatically reduced the sales activity in the second half of 2010.

Every region of the state, except the north Wisconsin area experience a drop in home sales.  Northern Wisconsin actually experienced an increase of 4.6 percent compared to 2009. The number of home salesin regions other than the north declined from2.6 percent to as much as 11 percent, depending on the area.  What is encouraging though is that price declines of about 2.5 percent or less were fairly typical.

For the positive housing market recovery to continue most economists believe that Wisconsin's unemployment rate, which has been improving over the last year and is ahead of the national rate must continue to improve.

The inventory of homes on the market has also been dropping. Those inventories have kep Wisconsin housing very affordable and are presenting excellent opportunities for home buyers. The Wisconsin Affordability Index which shows what percentage of a median priced home a buyer with a median family income can afford has improved in 2010. And although mortgage rates have inched up about a half of one percent, they still remain below 5 percent. With a growing economy, favorable interest rates, and healthy inventories and the overall quality of life in Wisconsin, I believe that the real estate market in Wisconsin is doing very well.


                                         Madison and Dane County Home sales for 2010

In  reviewing some home sales numbers obtained from the Wisconsin realtors Association at years end for  Dane County Wisconsin real estate, the area including Madison and it's immediate surrounding area I noticed a number of similarities to the real estate sales in the rest of Wisconsin.  I'll publish the  actual reported totals when they are available as not all sales may have been reported  as of Jan 26th, the day I ran these stats. But from the numbers that I was able to obtain it appears that the number of home sales for 2010 was down about 9% from that of 2009, in the Madison and Dane County Wisconsin area. With the year to date for 2010 being 4,987 homes sold in this area copared to 5,422 for 2009.  Similarly to much of Wisconsin, the totals were skewed somewhat with higher than usual sales in the first half of the year with about 61% of the annual totals occuring from January through June. In most years, the total for the first half of the year tends to be closer to 50% or less of the annual total  for the first six months of the year. The increase in first half of the year sales was almost certainly due to the tax credit that was available for purchases made during  that time.

I think more importantly than the number of sales is the fact that home prices seem to be doing well for the Madison and Dane County area with early numbers indicating a roughly 3.4% increase in the median home sales price for the year for this area.

A favorable employment picture I think is key to maintaining home values and ultimately the overall numbers of homes sold. Since the Madison area's employment picture tends to be better than many areas of the nation or even  within the state, we seem to be "holding our own" and although the real estate market is not as robust as we've seen in recent years, it appears that perhaps the worst is over and we're moving more towards a stronger real estate market.