Existing Home Sales Moderate As Median Prices Continue to Grow

MADISON, Wis. - Dec. 20, 2013 - PRLog -- Wisconsin REALTORS® Association, 2013 October Home Sales Report, November 18, 2013
Wisconsin's red-hot real estate market cooled in October, with sales of existing homes nearly identical to October of last year, according to the most recent housing report issued by the Wisconsin REALTORS® Association. October sales were just 0.1 percent lower than last October, representing the first time since July of 2011 that monthly sales did not increase over the previous year. The median sales price however continued to rise, increasing 5.6 percent to $142,500 in October relative to October 2012. On a year-to-date basis, median prices increased 7.5 percent compared to the first 10 months of 2012.

"While somewhat surprising, these numbers are not totally unexpected," said Steve Lane, Chairman of the WRA board of directors. "We are comparing sales between two very strong years and two very healthy markets," said Lane. Year-to-date sales in the state are 12.4 percent higher than the first 10 months of 2012.

Lane noted that the National Association of REALTORS® Pending Home Sales Index, a barometer of future home sales in the U.S., has been declining throughout the June-to-September period. "Wisconsin's third quarter sales were very strong even in light of the changes in this index, and so it's too soon to draw too many conclusions from one month of data," said Lane. Still, he suggested that even if this were an aberration, Wisconsin's growth rates of existing home sales were expected to moderate over time. "The base for comparison has been essentially growing at double-digit rates for more than two years, and that can't continue indefinitely," he said. Lane suggested that some of the decline might also be attributed to rising mortgage rates. Thirty-year fixed mortgage rates rose more than 1 percent between January and September this year before dropping about 30 basis points in October. "We need to remember that most of the October closings locked their interest rates in between late August and the first half of September, just as these rates were peaking," he said.

"The change in median prices was similar to that seen in September, although price increases have been moderating over the last few months," said Michael Theo, WRA President and CEO. Specifically, the median sales price increased 5.6 percent in October, which is relatively close to the 6.6 percent in September, but much lower than the unsustainable year-over-year increases of 12 percent in June and 9.2 percent in July. "The healthy influx of new listings throughout the year is paying dividends, keeping prices from overheating," said Theo. New listings are up 5.4 percent through the first 10 months of the year. As a result, housing in the state continues to be affordable to homebuyers in Wisconsin.

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