The Wisconsin residential home sales market set an all-time record in the fourth quarter of 2004, making last year the strongest housing market in state history, the Wisconsin Realtors Association reported.
Statewide, home sales increased 8.8 percent over the level established in the fourth quarter of 2003, setting a Wisconsin fourth-quarter record of 32,825 home sales, and a record of 123,900 sales for the year. Nationally, home sales were up by 7.3 percent for the quarter, and the Midwest region saw home sales rise at 5 percent as compared to the fourth quarter of 2003.
Kitty Jebwabny, WRA chairwoman, said, “Key economic conditions were in place through most of 2004.” The average statewide unemployment rate for the quarter was at 4.8 percent and 30-year fixed rate mortgages averaged 5.7 percent for the quarter.
Jebwabny also noted that job creation in the state has been solid for the last two quarters, with about 52,000 additional jobs in the state in fourth-quarter 2004 as compared to fourth-quarter 2003 (based on seasonally adjusted averages). She noted that even the manufacturing sector has improved, adding more than 16,000 manufacturing jobs in the state since the fourth quarter of 2003.
Sales figures for the fourth quarter were up in all regions of the state, based on Multiple Listing Service (MLS) data for Wisconsin counties. The growth rate for fourth-quarter 2004 over fourth-quarter 2003, was strongest in the South Central region of the state (up 12.9 percent), followed closely by the Northern and Western regions (10 percent-10.3 percent range). Also strong were the Southeastern and South Central regions (8.7 percent to 9.3 percent). Finally, the Central region experienced a 4.9 percent growth rate.
The South Central region was up a solid 12.9 percent in fourth-quarter 2004 as compared fourth-quarter 2003 with most of the counties experiencing growth over the period. Two counties saw their sales volume increase by 175 percent or higher. Although the increase in sales volume in Lafayette County was minor (from two to six units), the increased sales activity in Iowa County was more substantial (i.e., sales were up 175 percent, growing from 12 to 33 units sold).
In addition, five counties experienced double-digit growth on solid volume (i.e., Grant County grew 47.6 percent; Crawford County was up 43.5 percent; Green County advanced 31.3 percent; the largest county in the region, Dane County grew 16.1 percent, and Jefferson County expanded 14.1 percent in fourth-quarter 2004, as compared to the same quarter in 2003). Richland County was up 28.6 percent, albeit on low sales volume. Two counties grew at a modest pace (i.e., Sauk County was up 5.9 percent and the more urban Rock County had sales increase 4.2 percent) whereas two other counties experienced slight declines in home sales (i.e., Dodge County fell 3.4 percent and Columbia County declined 5.7 percent).
The Central region grew at 4.9 percent in fourth-quarter 2004 as compare to fourth-quarter 2003. Although Adams County experienced an increase of more than threefold, this is based on sales of just four units in fourth-quarter 2003. However, two other counties experienced solid growth (Waushara County was up 21.7 percent and Clark County increased 18.2 percent) on more substantial fourth-quarter 2003 volume. Marathon County, which is the only metropolitan county in the region grew at 9.1 percent and Wood County was essentially flat (up 1.2 percent) over the period. Only Portage County experienced a decline in volume (down 14.6 percent) although this was on relatively solid sales volume in fourth-quarter 2003.
Home prices in the fourth quarter of the year also experienced significant growth according to the National Association of Realtors report. As compared to fourth-quarter 2003, median home prices were up 9.1 percent to $152,700, with all regions enjoying price growth.
“This is impressive price appreciation and certainly driven in large part by high demand conditions in the housing market,” said WRA President William Malkasian, who also noted that inflation has been in the 2.5 percent to 3.5 percent range over the past couple of years. “The key to maintaining affordability when demand is high like this is to foster new construction,” he added.
Median housing prices rose in all six regions of the state when comparing fourth-quarter 2004 with the same quarter in 2003. Median home price appreciation was in the 3.9 percent range in the Central region; it was in the 6.1 percent-8.1 percent range in the Northeast, North, West and South Central regions, and it was 12.3 percent in the Southeast region.
The Southeast region saw median housing prices rise 12.3 percent to $164,000 in 2004 as compared to fourth-quarter 2003. All counties experienced solid housing price appreciation, with Milwaukee County up 12 percent to $140,000. This was followed closely by Washington (up 11.3 percent to $196,900), Racine (up 11.2 percent to $142,000), and Walworth (up 10.7 percent to $169,200) counties. The other counties experienced median price appreciation between 8 percent and 9 percent. Specifically, Sheboygan median prices rose 9 percent to $127,400; Ozaukee County was up 8.6 percent to $238,900; prices in Kenosha rose 8.1 percent to $154,700 and Waukesha County median prices increased 8 percent to $242,900. It should be noted that the strong price appreciation was accompanied by solid sales growth in most of these counties, (especially Washington and Racine), suggesting that demand is expanding faster than supply in those areas.
The region with the slowest median price appreciation was the Central region, which saw median prices rise 3.9 percent to $110,900 in fourth-quarter 2004 as compared to the same period in 2003. It should be noted that median price growth in this region still outpaced the rate of inflation over the period. Among the counties in the region reporting sales activity, two experienced healthy price appreciation. Specifically, median prices rose 9.4 percent to $125,000 in Portage County and they increased 8.6 percent to $88,200 in Wood County. Median prices were up slightly in Marathon County (up 1.8 percent to $124,300), but they fell 7.6 percent to $77,500 in Clark County, and they dropped more substantially (21.7 percent to $85,600) in Waushara County. It should be noted that price discounting in Waushara County may have contributed to the 22 percent increase in sales volume over the period.
The Wisconsin Realtors Association represents about 17,000 real estate brokers, sales people and affiliates statewide. Sales estimates for the state are provided by the National Association of Realtors, which seasonally adjusts quarterly sales figures. All county figures on sales volume and median prices are compiled by the WRA and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter.
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