The Wisconsin housing market continues to show signs of recovery as the busy season for real estate hits full stride.
Statewide, home sales increased again in May, the 23rd consecutive month, according to the Wisconsin Realtor’s Association. Every region in the state experienced growth last month, with the largest gains in south central Wisconsin, which increased sales by nearly 30 percent compared with May 2012. Year to date sales are approaching 28,000 homes.
“Historically, the months of April and May into June have always been good months,” said Mike Pietrek, president of the La Crosse Area Realtors Association. “We were anticipating the numbers, and we’re quite pleased that it was fulfilled.”
Sales in western Wisconsin have been strong and steady overall, with a nearly 19 percent increase from last year — slightly higher than the state average of about 18 percent. Regionally, La Crosse County was the leader with 149 homes sold last month. Monroe County was next with 46. Twenty-three homes were sold in Trempealeau County.
“The thing we have here locally is that we didn’t see the rapid increase and huge fall in property value that others saw,” Pietrek said. “In La Crosse County, our unemployment is typically below the state average. We have a more stable environment here.”
With more confidence, consumers are starting to drive increases in the “move-up” home buyers market, Pietrek said. Established homeowners with renewed faith in property values and are choosing to upgrade into higher-priced homes, leaving a good inventory of starter homes for first-time buyers.
Existing home sales climbed more than 10 percent from January to April this year compared with the same four-month period in 2012, meaning that sellers are jumping back into the market to meet demand. New home listings increased by more than 16 percent last month compared to the same time last year.
Increasing supply to meet demand will have a moderating effect on home prices, although sales activity drove prices up more than 4 percent to a statewide median of $144,000. In the northern part of the state, median prices fell, but that fluctuation often occurs when the mix of homes on the market shifts between primary and secondary homes. In La Crosse County, the median price for a home dropped 9.7 percent since May 2012, but as a region, home prices in western Wisconsin increased more than 5 percent from $132,000 to $139,000 this year.
And experts expect this trend to continue. June is the strongest month of the real estate season, and gains in April and May have left the industry poised for a strong peak this summer, said David Clark, an economics professor at Marquette University.
With the housing market back on the upswing and median prices and interest rates on the rise, potential home buyers missed the best pricing window.
The Wisconsin Housing Affordability Index, which calculates what percentage of a median-priced home a median income family can afford based on current mortgage rates and a 20 percent down payment, is dropping after its peak in January of this year, but buying a home is still very affordable, Clark said.
“You can still get a mortgage right at 4 percent,” he said. “Those are numbers that 10 or 15 years ago people couldn’t dream of.”