Blog Contributor: Rachel Clark | Social Media Marketing Specialist for MDR
WHAT IS GOING ON with the housing market? This has been the most common question we have heard from clients in the last few years, and it is one that doesn’t have a true straight-forward answer, but new data from the Wisconsin Realtors Association (WRA) can help make the trends more clear in the midst of confusing times.
The housing market has gone through plenty of ups and downs throughout the years, but since 2020, there have been some interesting new developments in the real estate world.
In Wisconsin, housing trends have indicated a lower volume of sales and a higher average price compared to last year’s statistics.
The decline in total home sales is speculated to be simply due to the unique circumstances surrounding 2020 and the record home sales that year.
However, this is also due to an inventory problem, since total statewide listings are down over 10% from last year while the monthly home sales are only down 6.3% from last year.
“Given the supply problem, it’s not surprising that sales this summer have not quite kept up with the record pace established last summer. Even though realtors have been moving homes quickly, they can only sell what’s on the market, so we’ll continue to struggle to increase our sales on a year-over-year basis until the inventory situation improves,” said Mary Duff, 2021 Chair of Board of Directors for Wisconsin Realtors Association.
Because of this inventory problem, homes are listed for less time on the market, with less active listings overall.
“If you look at 2015, the number of sales were 186 in September, but at the end of the month there were six times the number of active listings, which shows a balanced market with 6 months of inventory. Fast forward to September 2021, we are only at about one month of inventory with the amount of active listings,” said Kevin Clark, Broker and Listing Agent for Making Dreams Realty with Keller Williams.
The other big indicator of the housing market this year is the increased home prices.
Looking at this from a simple supply and demand standpoint, the lower inventory (or supply) has increased the demand for the few listings that are active, therefore inflating the price.
Another perspective to the higher prices of listings is that overtime, the consensus is that home prices always go up, and that’s why a home purchase is considered an investment.
“From 2011 to 2021 what stands out to me from the month of August (year over year) is that the median sales price has more than doubled combined with the highest number of sales in the past 11 years and the lowest amount of available inventory,” Kevin Clark, said.
In the south central region of Wisconsin, the majority of homes sold were in the $200,000 to $349,999 category in the last year, while the next highest category was in the $125,000 to $199,999 range.
“The purpose for looking at these numbers is to show that we will continue to run into limited inventory, probably into the next year at least, making it more challenging for buyers than it was in 2015, but we are still getting these deals done. It is all about building trust and following the process,” Kevin Clark said.
If you have any more questions about the housing market or real estate in general, don’t hesitate to give our team at MAKING DREAMS Realty a call: 608.480.8599.
Real estate market trends data from: https://www.wra.org/HousingStatistics/