For More Information Contact:
Michael Theo, WRA President & CEO, 608-241-2047, mtheo@wra.org or David Clark, Economist, C3 Statistical Solutions and Professor of Economics, Marquette University, 414-803-6537, dclark@c3stats.com
MADISON, Wis. — 2013 was a robust year for Wisconsin’s housing market, with both sales and prices increasing by solid margins, according to the year-end housing report released by the Wisconsin REALTORS® Association (WRA). Existing home sales were up 10.8 percent compared to 2012, and median prices increased 7.2 percent to $143,000 over that same time frame.
“Strong sales dominated 2013, which is remarkable given that this is compared to 2012, which was also a very good year for the housing market,” said Steve Lane, chairman of the WRA board of directors. According to Lane, existing home sales were up in every region of the state in 2013 relative to the previous year.
In 2013, the South central, West and Southeast regions all saw double-digit margins, with sales up 15.4 percent, 12.4 percent and 11.1 percent, respectively. Home sales in the Central region were up 9.2 percent, increased 7.4 percent in the Northeast region and 5.7 percent in the Northern region of the state.
Existing home sales totaled 69,558 for 2013, which is 34 percent higher than sales in 2011, the year in which sales bottomed out in the state, and 2.7 percent above 2007 levels, the year the Great Recession officially began. Lane noted housing sales were strong despite raising interest rates and prices. “Mortgage rates have increased a full percentage point since January, and median prices have grown consistently throughout the year,” Lane said. “Yet the entire state posted genuine gains in 2013, a trend we hope and believe will continue into the new year,” Land said.
Housing prices rose in 2013, increasing 21 of the last 22 months, with median prices increasing 7.2 percent in 2013 compared to 2012. “Prices have appreciated more than three times the rate of inflation.” said Michael Theo, WRA President and CEO. Annual inflation rates were at or below 2 percent throughout 2013.
“There are a number of reasons for the strong growth in prices, not the least of which is the dramatic reduction in foreclosures in the state,” said Theo. Foreclosures dropped 31.9 percent to 15,563 unique foreclosures in 2013 compared to 22,852 unique cases in 2012. The number of unique foreclosures in 2013 is only slightly higher than the 15,231 unique cases recorded in 2006, prior to the onset of the recession. “The combination of fewer foreclosures and higher sales has reduced inventory levels statewide,” said Theo. Months of inventory fell to 7.7 months of supply in December, down 12.5 percent from the 8.8 months of inventory in December 2012. “Sales were so strong that even a 5 percent increase in new listings during the year didn’t add enough housing supply to lower prices,” he said. Finally, the state labor market has shown signs of improvement, with the state unemployment rate falling to 6.3 percent in November, which is the lowest rate of joblessness since November of 2008. “There’s no doubt that this market has been tightening throughout the year,” Theo said.
Still, housing remains affordable in Wisconsin. The Wisconsin Housing Affordability Index, which shows the percent of the median-priced home that the family with median income can afford to buy, assuming current mortgage rates and 20 percent down, stood at 227 in December. This is down slightly from November’s index of 232, but significantly below the level of 274 seen in December of last year. It is also well above the national level. which was 170.3 in November.
“Overall, 2013 was a very good year for housing in Wisconsin, and we are hopeful that sales will continue to grow in 2014,” said Theo. There are recent signs of healthy growth in the national economy, with third- quarter real GDP growth rate of 4.1 percent a welcomed change from the weak growth we saw earlier in the year. “Certainly higher mortgage rates and higher prices will moderate our growth going forward, but we believe that the prospects for a solid market in 2014 are good, and using an experienced REALTOR® is still the best way to find value in this market,” he said.
###
The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing over 13,500 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.
