Wisconsin’s residential home sales set another annual record as existing-home sales in the fourth quarter of 2005 remained near the all-time-high pace established in the fourth quarter of last year, according to the most recent analysis conducted by the Wisconsin Realtors Association.
Sales of existing homes in Wisconsin for the fourth quarter totaled an estimated 30,075 units, which is nearly unchanged from the strongest fourth quarter on record, which occurred in 2004. Indeed, existing-home sales in Q4 2005 were just 0.3 percent off the Q4 2004 pace.
“This is an amazing market,” said WRA Chairman Jeff Kitchen. “That home sales stayed near their fourth-quarter 2004 levels even as mortgage rates inched upward in recent months is a true testament to the strength of this market,” said Kitchen. The two most important factors driving this market are still-low interest rates and strong job growth, and he noted that although conventional 30-year fixed-rate mortgages were up slightly from their levels of last year, they remain low by historical standards. Furthermore, the Wisconsin unemployment rate continues its downward movement, with fourth quarter unemployment in the state now just over 4.6 percent. “This is a strong job market that should continue to fuel home sales in the state,” he said.
Comparing the fourth quarter of 2005 with the same quarter the previous year, existing-home sales were up by solid margins in the less urban regions of the state. Specifically, home sales rose 18.1 percent in the Northern region and grew at an 8.6 percent pace in the Central region of the state on solid vacation-home activity. Sales volume was essentially unchanged in the South Central region, whereas the level of sales fell modestly in the Southeast (-4 percent) and at a faster pace in the Northeast (-7.2 percent) and Western (-10.4 percent) regions.
Home prices in the fourth quarter of the year were up by more than the annual inflation rate, according to the Realtors’ report. As compared to the fourth quarter of 2004, median home prices increased 5.2 percent to $162,000, with four of the six regions experiencing median price appreciation, and one region essentially unchanged.
“This is certainly an indication that the housing market remains healthy in Wisconsin and that real estate is an excellent way to grow family wealth,” said WRA President William Malkasian.” He noted that although mortgage rates have increased a little more than a half percent since June of last year, this does not appear to have caused sales prices to fall statewide. “In fact, the only region in the state to see median values fall was the Northern region, and this was likely due to the growing popularity of lower-priced second homes in the area, rather than systematic price discounting,” said Malkasian. He continued to emphasize that there is no evidence of a housing bubble in the state.
The Central region saw median prices grow at a healthy 11 percent to $123,100 in the fourth quarter of 2005, with prices rising in all areas. Prices in the Southeast region grew at a robust 7.6 percent to $176,400 in Q4 2005 as compared to the same period last year, with median prices up in all counties in the region. Prices in the South Central region were up 5.4 percent to $178,200 in the fourth quarter and stood at $156,000 in the Western region, 3 percent higher than those established a year ago. Home prices for the Northeastern region were basically unchanged in Q4 2005 compared to Q4 2004, dropping a mere 0.1 percent to $130,800 while prices in the Northern region dropped 8.8 percent to $130,000 in the fourth quarter.
The Wisconsin Realtors Association is one of the largest trade associations in the state, representing over 17,000 real estate brokers, sales people and affiliates statewide.
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