Lack of houses on the market inflates prices
April 2018 saw fewer sales than in April 2017
The combination of a short supply of homes for sale and big demand by potential buyers resulted in higher prices but fewer sales in April than a year ago in Wisconsin.
A report Monday from the Wisconsin Realtors Association shows there were 6,716 closed sales in the state last month, down 0.4 percent from 6,745 in April 2017.
At the same time, the median sale price in Wisconsin in April was $180,000, up 5.9 percent from $170,000 a year ago.
Listings of homes for sale in the state were off 14 percent from April last year, at 9,943 from 11,557.
Through the first four months of 2018, listings trailed the same period in 2017 by 19 percent.
“Tight supply and strong demand are a recipe for strong price appreciation, and that is exactly what we are experiencing in Wisconsin,” Michael Theo, president and chief executive officer of the Wisconsin Realtors Association, said in the organization’s monthly report.
With a state unemployment rate of 2.8 percent — the lowest level since the U.S. Bureau of Labor Statistics began tracking statewide unemployment rates in 1976 — there are plenty of buyers in the market.
“The economy is very strong, and under normal circumstances, we would be seeing robust growth in home sales,” said Peter Sveum, chairman of the state Realtors group.
With the peak sales season now under way, Wisconsin clearly is a seller’s market. More than half of all home sales in Wisconsin take place between April and August.
The median sale price through the first four months of 2018 was 6.7 percent higher than a year ago, at $174,000 from $163,000. Sales remained in positive territory over the four-month span, rising 1.7 percent to 20,572 from 20,237.
But as the law of supply and demand keeps pushing prices higher and mortgage interest rates inch up, fewer buyers will be able to afford a house, even with modest increases in family income, Theo noted.
“Unfortunately, we don’t see many signs of immediate relief, so we expect monthly sales to struggle to reach the levels of 2017 as we get into the heat of the summer market,” said Theo.
The Realtors group said seasonally adjusted permits for new residential construction were up 8.4 percent in April from the same month last year, offering a potential bright spot.
“We certainly hope that new home construction will continue to improve, but we need to see a similar spike in existing home listing before this inventory crisis improves,” Theo said.
Central Wisconsin, which includes Wausau and Marathon County, saw the biggest leap in median sale prices in the January-through-April period. The median price for homes sold in that stretch was $136,100, up from $119,400.
Through the first four months of the year in south central Wisconsin, which includes the Dane County market, the median sale price was $217,500, a 10.4 percent jump from $197,000 through April 2017.
Northeast Wisconsin, featuring the Fox Valley, had an 8.6 percent increase in sale median price, to $149,900 from $138,000, in the first four months of this year.
In southeast Wisconsin, the median sale price increased 4.1 percent, to $180,000 from $172,900.