2014 Wisconsin Housing Market

Last year’s forecast for the 2013 Wisconsin housing market appeared seemingly positive in all aspects. This market analysis predicted an upswing in real estate activities for the residential segment. Even the most perfunctory glance at the hard data supplied by the Wisconsin Association of Realtors confirmed these predictions. As most market analysts expected, the housing market trading activities in Wisconsin continued their upswing last year on a month-by-month basis. But, what about the 2014 Wisconsin housing market? Market analysts expect the 2014 Wisconsin housing market will continue this trend of growth (albeit at a comparatively slower pace). That, in and of itself, is not bad news. Last year’s record setting market was really more or less unsustainable. This new pace indicates a much more balanced and stable market with less wiggle room for dramatic price increases and decreases. The market is less susceptible to manipulation by major investors. As the ‘waves’ of the 2014 Wisconsin housing market quiet down, private sellers and buyers can finally take a more relaxed approach to trading on the market.

Here are some key figures for the current year on the 2014 Wisconsin housing market as reported by the state’s Realtor association:

  • The overall number of house sales on a month-to-year basis remained relatively stable with a slightly downward trend through 2014. As of the moment when we posted our report (Q4, 2014), 59,062 homes sold throughout the entire state through 2014. Compare that figure to the 69,664 that sold last year. The remaining two months of this year could even out the situation. Up until May of this year, slightly fewer completed transactions took place per month. In May, the market experienced an uptick followed by a return to lower transaction throughout the remainder of the summer. In October 2014, 6,347 homes sold compared to the lower 5,748 figure from the same month in 2013. Although experts foresee any year’s final two months as the slow period for home sales, any uptick in activities might balance out (or close the gap between) the number of homes sold this year and last year.
  • The median price of homes in Wisconsin continued its upward trend through 2014. Thus far, the 2014 Wisconsin housing market continued the market trend from 2011. The median price of housing units in the state declined dramatically that year to just over $132,000. Homes typically sold at $140,000 in the previous year. Between 2012 through 2014, the figure slowly increased to $148,500. That figure sits significantly higher than last year’s $143,500. The current median price of Wisconsin homes appears to sit in a safe middle ground between the exorbitant $160,000 price tag posted during the bubble and the gloomy $120,000 from two years ago.
  • The number of sales also remained quite steady following monthly expectations from 2014. Over 6,300 homes sold in October 2014. That figure is far better than the 3,800 homes that sold in October 2011-2013.

2014 Wisconsin Housing MarketOf course, current market figures only paint one portion of the complex picture that is the 2014 Wisconsin housing market. We’ve created a list of some more general factors that continue to influence the performance of the market. These factors stem from the performance of the U.S. economy, conditions in Wisconsin, and conditions in the other, surrounding states in the area:

  • Economic recovery still remains sluggish. As some analysts noted back in the years following World War II, the real GDP per capita increased by roughly 2 percent per year. Since 2009, the U.S. economy only recouped about 1.4 percent on average each year. Balance sheets for both investors and households still bear the signs of the damage inflicted by the 2007 recession. The trauma of these setbacks still negatively affect consumer behaviors.
  • Employment growth remains slow. Following WWII, it grew at about 2.8 per cent each year, on average. This time around, it has only increased by 1.1 per cent each year since 2009 to the present day. That rate actually almost matches the rate of population growth.
  • The Wisconsin real estate inventory has all but cleared up; almost no foreclosures exist on the current market and the stock improved dramatically. However, the Midwestern area of the United States remains in a frustratingly slow uptick when compared to other areas of the country. Wisconsin fared particularly poorly in terms of employment. Its current rates sit at the midpoint for the area. This figure lags far behind the national average.
  • Median household incomes still remains low throughout most of the Midwest (excluding Iowa). Iowa continues to benefit from a fuel boom.

Here are some encouraging and discouraging factors which experts expect will impact the Wisconsin housing market over the final two months of the year:

  • Solid pace of growth for the median price of a home

Median, October home prices were up by 4.2 percent compared to the same month in 2013 according to a recent report released by the Wisconsin Realtors Association. This positive trend continued for the past 31 (out of 32) months in Wisconsin. Because of this increase, real estate experts believe the  market will continue heading in the same direction for the rest of the year. The year-to-date figures confirm this assumption. Median prices rose by 2.5 percent compared to the first ten months in 2013.

  • Housing seen as an investment can protect from inflation swings

At the moment, housing investments appear to be a safe bet considering the increasing trend of median house prices in the residential area of the 2014 Wisconsin housing market. Homeowners searching for a way to safeguard their assets against the still relatively unstable evolution of inflation in the United States can literally place their money on home prices. That’s primarily due to the 2.5 percent increase in value that median home prices experienced over the first ten months of this year compared to the same period last year. That percentage outpaces the rate of inflation in this country which currently stands at 1.7 percent.

  • Homes in  Wisconsin are still affordable. Although, the market is also fairly balanced

With prices on the rise, an outside observer might begin to worry about the affordability of the 2014 Wisconsin housing market. However, the WRA report for the state’s Housing Affordability Index points to a sweet spot in terms of pricing and householder incomes. The value of the index for October 2014 stood at a fairly balanced 227 points. That figure is only slightly higher than the 223 value recorded back in October 2013. This index gauges the percent of median priced homes that a median income household can afford while also considering the current mortgage rates (following a 20 percent down payment).

Typically, real estate market observers across the United States will tell you that the winter months are really not ideal for buying a home. The market moves at a sluggish pace this time of the year and fewer homes are posted for sale. However, an analysis of sales patterns in Wisconsin indicates that winter might very well be the best time to buy a house. At the peak of winter, prices tend to soften up the most. Sellers realize there are fewer buyers interested in their properties during this time of the year. This idea really goes back to supply and demand. Demand goes down while supply remains the same; therefore, the prices follow suit. Aside from putting the buyers at an advantage, this also means that sellers can play it safe. Most people interested in home purchases at the end of the year are determined to go through with their plans. If you’re interested in buying or to selling a home in Wisconsin, the remaining two months of 2014 might just represent the perfect opportunity you’ve been searching for.