| Articles from The Premier Team |
Softening sales but steady home values in the third quarter of 2007 made Wisconsin's housing
market stronger than many other states, according to figures released by the Wisconsin REALTORS
association. The sale of existing homes in the third quarter fell 9.8 percent compared to the same quarter
last year, but median prices actually rose 2.4 percent according to the REALTORS report. “while home
sales in Wisconsin have certainly slowed when compared to the record levels of 2005, our local markets
are far less volatile than housing markets elsewhere in the country,” said WRA Chairman Michael
Spranger. “While our markets don’t rise as quickly during periods of rapid economic expansion, the good
news is they don’t fall as far when the market contracts either,” he noted. We’re not in the same kind of
trouble you read about in other markets around the country. The fundamental elements of a stable real
estate market remain strong in Wisconsin.”
Unlike other regions of the country, Wisconsin’s median home prices actually rose by a modest
margin (+2.4 percent) over the Q3 2006 to Q3 2007 period. “This should dispel any notion that Wisconsin
is in the midst of a real estate bubble,” said WRA President William Malkasian. “While this is a great time
for buyers to get into the housing market as interest rates remain low and inventories are healthy, housing
remains an excellent way to maintain and grow household wealth,” said Malkasian.
Much of the current market concerns focus on lending and credit issues according to the REALTORS
association. "Lax underwriting standards that existed in the subprime mortgage market have largely been
corrected, but not before they created serious problems in financial markets, especially in Western and
Southern regions of the country" said Malkasian. While quick action by the Federal Reserve has helped to
mitigate the immediate crisis, this problem will continue to impact some regional housing markets.
However, it is important to emphasize that the Wisconsin housing market is far less impacted by the
subprime mess than places like California, Nevada, Arizona and Florida as indicated by foreclosure
figures," said Malkasian. "Wisconsin has a smaller fraction of its mortgage loans that are subprime than is
the case elsewhere, and our foreclosure rate is only about one third the nation, and far lower than the rate
of these problem states," he noted
While sellers would always prefer stronger markets, a softer market represents an excellent
opportunity for buyers. Many communities are seeing increasing inventories, which, when combined with
the current low interest rate environment affords many credit-worthy first time buyers the opportunity to get
into homes that would otherwise be out of reach, said Spranger. He also noted that more substantial
upward price pressure will result when the existing home market rebounds. In fact, even after the recent
softening in the housing market, it is important to point out that median prices have grown 32.2 percent
from emerging from the last recession in late 2001, making housing a solid investment for households.
market stronger than many other states, according to figures released by the Wisconsin REALTORS
association. The sale of existing homes in the third quarter fell 9.8 percent compared to the same quarter
last year, but median prices actually rose 2.4 percent according to the REALTORS report. “while home
sales in Wisconsin have certainly slowed when compared to the record levels of 2005, our local markets
are far less volatile than housing markets elsewhere in the country,” said WRA Chairman Michael
Spranger. “While our markets don’t rise as quickly during periods of rapid economic expansion, the good
news is they don’t fall as far when the market contracts either,” he noted. We’re not in the same kind of
trouble you read about in other markets around the country. The fundamental elements of a stable real
estate market remain strong in Wisconsin.”
Unlike other regions of the country, Wisconsin’s median home prices actually rose by a modest
margin (+2.4 percent) over the Q3 2006 to Q3 2007 period. “This should dispel any notion that Wisconsin
is in the midst of a real estate bubble,” said WRA President William Malkasian. “While this is a great time
for buyers to get into the housing market as interest rates remain low and inventories are healthy, housing
remains an excellent way to maintain and grow household wealth,” said Malkasian.
Much of the current market concerns focus on lending and credit issues according to the REALTORS
association. "Lax underwriting standards that existed in the subprime mortgage market have largely been
corrected, but not before they created serious problems in financial markets, especially in Western and
Southern regions of the country" said Malkasian. While quick action by the Federal Reserve has helped to
mitigate the immediate crisis, this problem will continue to impact some regional housing markets.
However, it is important to emphasize that the Wisconsin housing market is far less impacted by the
subprime mess than places like California, Nevada, Arizona and Florida as indicated by foreclosure
figures," said Malkasian. "Wisconsin has a smaller fraction of its mortgage loans that are subprime than is
the case elsewhere, and our foreclosure rate is only about one third the nation, and far lower than the rate
of these problem states," he noted
While sellers would always prefer stronger markets, a softer market represents an excellent
opportunity for buyers. Many communities are seeing increasing inventories, which, when combined with
the current low interest rate environment affords many credit-worthy first time buyers the opportunity to get
into homes that would otherwise be out of reach, said Spranger. He also noted that more substantial
upward price pressure will result when the existing home market rebounds. In fact, even after the recent
softening in the housing market, it is important to point out that median prices have grown 32.2 percent
from emerging from the last recession in late 2001, making housing a solid investment for households.
| Wisconsin Home Sales Outperform Other States By Dr David Clark, Economist |