Wisconsin Home Sales and Prices Fall as Unemployment Rises in Second Quarter

MADISON, WI – August 12, 2009 – (RealEstateRama) — Wisconsin home sales and median prices both fell in the second quarter of 2009 relative to that same quarter in 2008 according to data just released by the Wisconsin REALTORS® Association (WRA). But despite significant job losses in manufacturing and other sectors that have pushed the state unemployment rate to 9 percent in June, REALTORS® say the state housing market is actually showing signs of stabilization. The decline in home sales was 10.5 percent, which was higher than both the Midwest region, which fell 5.3 percent, and the nation, which was down just 2.9 percent, but it was well below the steep reductions in Wisconsin sales volume that we have seen over the last few quarters.

“Overall the reduction in existing home sales of 10.5 percent, comparing the second quarter of 2009 with the second quarter of 2008, was much more moderate than we experienced earlier in the recession where the average decline has been much steeper,” said Michael Mulleady, Chairman of the Board of the WRA. “In fact, we saw state existing home sales fall 19.2 percent in 2008 compared to 2007 and they dropped 22.6 percent in the first quarter of this year, so it is encouraging to see the pace of the contraction of Wisconsin home sales moderate,” noted Mulleady. “This is the first indication that we may be getting ready to turn the corner on real estate in the state,” said Mulleady.

Mulleady also pointed out hopeful signs that the national economy may be starting to emerge from the depths of this steep recession. He noted the Conference Board’s Index of Leading Economic Indicators was up for the third consecutive month in June of this year, and the Dow Jones Industrial Average closed above 9000 in July with the upward trend continuing into the first half of August. “These are positive developments because improvements in the national economy will help stimulate job growth in the state, which will directly improve Wisconsin’s housing market,” said Mulleady.

Median home prices in Wisconsin fell 9.9 percent to $146,000 in the second quarter of 2009 compared to the second quarter of 2008, according to the WRA. However, William Malkasian, WRA President, cautioned that these numbers are unique to this market. “These data need to be taken with a grain of salt because lower priced homes are moving more briskly than higher priced homes, thus skewing the median price downward,” Malkasian said. “The most important factor is the federal tax credit on housing, which qualifies first-time buyers for up to $8,000 in tax credit on their purchase. This is a strong enticement for first-time buyers who typically buy lower cost starter homes, but it also brings down the state median price,” noted Malkasian.

Still, sellers remain highly motivated,” Malkasian said, “and when you combine the available tax credit with mortgage rates at near historic lows it makes this an excellent market for credit-worthy buyers.” With such strong inventories statewide, buyers have a lot of options, and there are solid advantages to working with a REALTOR® to help identify the best values in this market.

For More Information Contact: David E. Clark, Economist, C3 Statistical Solutions Inc. Office phone: 414-803-6537

The Wisconsin REALTORS® Association is one of the largest trade associations in the state, representing more than 15,000 real estate brokers, salespeople and affiliates statewide. Sales estimates for the state are provided by the National Association of REALTORS®, which seasonally adjusts quarterly sales figures. 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.