Wisconsin Housing Market Remains Hot in January

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1 Date: 2/22/16 For Release: Immediately For More Information Contact: Michael Theo, WRA President & CEO, , or David Clark, Economist, C3 Statistical Solutions and Professor of Economics, Marquette University, , Wisconsin Housing Market Remains Hot in January Madison, Wis. The sales of existing homes grew rapidly in January, which is putting strong upward pressure on prices, according to the most recent analysis of the Wisconsin housing market by the Wisconsin REALTORS Association (WRA). Home sales in January jumped 10.4 percent over January 2015, and statewide median prices surged 10.1 percent over that same period, increasing to $148,700. The winter is always our slowest season, but this has been an unusually strong winter thus far, said K.C. Maurer, WRA board chairman. We will certainly see home sales pick up as we move into the spring, which signals a strong real estate market for the first half of 2016 and hopefully beyond. Compared to the same month last year, sales were up 10.2 percent in December and 10.4 percent in January. The mild winter certainly helped, but this is really just a continuation of the strong pattern seen throughout 2015, said Maurer. Every region in the state saw home sales grow between January 2015 and January 2016: the most robust sales growth occurred in the Northeast, which increased 17.2 percent, as well as the West region, which grew 16.1 percent. Home sales in the Southeast region rose 10.2 percent, followed by the North, South Central and Central regions, which grew between 5.5 percent and 6.7 percent. Prices, however, also rose significantly in January, up 10.4 percent over last year. This is the strongest price increase we ve seen since the middle of 2013, said WRA President & CEO Michael Theo. We re seeing a confluence of a solid state economy but also a very low and falling supply of homes on the market. Theo noted the state unemployment rate stood at 4.3 percent in December, compared to a national rate of 5 percent for that month. However, inventories of homes for sale have dropped to the lowest level since the WRA began tracking inventory levels at the end of We had just 36,450 unsold homes in January, which is the first time we have seen supply fall below 40,000 units, said Theo. The absorption rate shows how many months it would take to sell the statewide inventory, given the average monthly sales over the last year. We ve got just 5.7 months of unsold inventory, and it s gotten tighter throughout the state, he said. Statistics show metropolitan areas of the state have just 4.3 months of supply while rural areas have fallen to 9.3 months of supply. Increased demand and dwindling supply have hurt housing affordability in Wisconsin, but not as much as expected. While it has slipped a little, housing affordability in Wisconsin remains strong due to modest estimated family income growth and low mortgage rates, said Theo. The Wisconsin Housing Affordability Index measures the percent of the median-priced home that a buyer with median family income can afford to buy. This assumes a healthy down payment of 20 percent with the remainder financed with a 30-year fixed-rate mortgage. For January, the index was 244, which is down from 268 last January. With current mortgage rates at just under 4 percent, we re only about half a percent higher than where rates bottomed out during the housing recession in late 2012, said Theo. He noted that the Federal Reserve has begun to raise short-term interest rates, and while the pace of the increase is uncertain, it will eventually put upward pressure on mortgage rates. These double-digit housing price increases will eventually take their toll on affordability, so this is an ideal time for buyers to enter the market, said Theo, noting that using an experienced REALTOR is one of the best ways to find the best values in this tight housing market. The Wisconsin REALTORS Association is one of the largest trade associations in the state, representing over 14,000 real estate brokers, sales people and affiliates statewide. All county figures on sales volume and median prices are compiled by the Wisconsin REALTORS Association and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter. All data collected by Wisconsin REALTORS Association are subject to revision if more complete data become available. Beginning in 2010, all historical sales volume and median price data at the county level have been re-benchmarked using the Techmark system which accesses MLS data directly and in real time. The Wisconsin Housing Affordability Index is updated monthly with the most recent data on median housing prices, mortgage rates, and estimated median family income data for Wisconsin. Data on state foreclosure activity is compiled by Dr. Russ Kashian at the University of Wisconsin Whitewater. 1

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3 Wisconsin Regional Report Provided by the Wisconsin REALTORS Association Report Criteria: Reflecting data through: January 2016 State: WI Type: Residential Southeast Kenosha 138, , % % Southeast Milwaukee 122, , % % Southeast Ozaukee 218, , % % Southeast Racine 119, , % % Southeast Sheboygan 126, , % % Southeast Walworth 163, , % % Southeast Washington 195, , % % Southeast Waukesha 254, , % % Southeast Regional Total 154, , % 1,333 1, % Milwaukee Milwaukee 122, , % % Milwaukee Ozaukee 218, , % % Milwaukee Washington 195, , % % Milwaukee Waukesha 254, , % % Milwaukee Regional Total 165, , % % South Central Columbia 155, , % % South Central Crawford 103,900 NA NA % South Central Dane 231, , % % South Central Dodge 120, , % % South Central Grant 102,500 98, % % South Central Green 115, , % % South Central Iowa 118, , % % South Central Jefferson 171, , % % South Central Lafayette NA NA NA NA 6 NA South Central Richland NA 53,552 NA % South Central Rock 129, , % % South Central Sauk 150, , % % South Central Regional Total 180, , % % 2

4 West Buffalo NA NA NA % West Chippewa 122, , % % West Dunn 119, , % % West Eau Claire 145, , % % West Jackson NA 54,000 NA % West La Crosse 136, , % % West Monroe 119,250 85, % % West Pepin NA NA NA % West Pierce 198, , % % West St. Croix 199, , % % West Trempealeau 116, , % % West Vernon 75,337 73, % % West Regional Total 150, , % % Northeast Brown 152, , % % Northeast Calumet 174, , % % Northeast Door 179, , % % Northeast Fond du Lac 111, , % % Northeast Green Lake 83, , % % Northeast Kewaunee NA 115,000 NA % Northeast Manitowoc 101,950 74, % % Northeast Marinette 103, , % % Northeast Menominee NA NA NA % Northeast Oconto 83, , % % Northeast Outagamie 130, , % % Northeast Shawano 96, , % % Northeast Waupaca 114,500 77, % % Northeast Winnebago 130, , % % Northeast Regional Total 130, , % % 3

5 Central Adams 120,000 90, % % Central Clark 96,000 78, % % Central Juneau 94,500 84, % % Central Marathon 122, , % % Central Marquette 94,900 67, % % Central Portage 148, , % % Central Waushara 64, , % % Central Wood 89,000 77, % % Central Regional Total 112, , % % North Ashland NA NA NA % North Barron 117,000 80, % % North Bayfield 131,750 97, % % North Burnett 197, , % % North Douglas 97, , % % North Florence NA NA NA % North Forest NA NA NA % North Iron NA NA NA % North Langlade 80,000 53, % % North Lincoln 86, , % % North Oneida 130,900 99, % % North Polk 155, , % % North Price NA NA NA % North Rusk 139,900 NA NA % North Sawyer 200, , % % North Taylor NA NA NA % North Vilas 250, , % % North Washburn 130,000 95, % % North Regional Total 130, , % % Statewide Statewide 1/2016 1/2015 % Change 1/2016 1/2015 % Change 148, , % 3,659 3, % Wisconsin REALTORS Association