Wisconsin's housing resale market set a new first-quarter peak this year, even as the national boom faltered.
Sales volume rose an annualized 3.5% to 30,525, as median price rose 3.6% to $158,200, the Wisconsin Realtors Association reported Tuesday. That coincided with 1.7 million resales nationwide, 2.1% below a year earlier, and a $217,900 median price, according to the Chicago-based National Association of Realtors.
"It's a balancing act, but so far a stronger economy has more than offset the dampening effect of rising interest rates," said Marquette University Economist David E. Clark.
Buyers, keenly aware that higher rates have diminished their purchasing power, have taken advantage of the recent onslaught of "for sale" listings, Clark said. "They're putting downward pressure on prices. We're seeing some sellers lowering their asking price."
Conditions are normalizing after a few super sales years, said the economist, whose Fulton, N.Y.-based firm, C3 Statistical Solutions, has a contract to analyze state realty data.
"I never thought that the 7%, 8%, 9%, 10% appreciation levels we saw were sustainable," Clark said. "What we've got this year is solid performance."
Thirty thousand new jobs statewide sure helped, noted Jeff Kitchen, chairman of the Wisconsin Realtors Association. Those jobs, plus population gains, "imply that the economy will continue to support a strong market in Wisconsin for the foreseeable future," he said.
Some features of Wisconsin's solid performance, gleaned from association sales figures:
• Sales pace climbed in every region: the west, 1%; the southeast, 1.9%; the north, 7.3%; south central, 8% and central, 13.5%.
• Median price climbed in every region but the west, which slipped 1.1% to $150,000.
The new state range: $65,000 in Adams County to $256,200 in Waukesha County.
Metro Milwaukee counties' year-to-year gains: Milwaukee, $153,300 from $144,300; Ozaukee, $233,300 from $227,800; Washington, $202,500 from $195,600; Waukesha, $256,200 from $234,800.
• Median prices dropped in some places, which in small markets looked dramatic. Among them: St. Croix, down 4.2%; Kewaunee, down 35%; Manitowoc, down 6.5%; Oconto, down 7.8%; Clark, down 15.4%; Burnette, down 4.3%; Douglas, down 12%; Polk, down 23.4%; and Oneida, down 8.8%.
• Some boom towns, especially vacationland boom towns, show no signs of fading since first-quarter 2005. Dodge County rose 6.8% in sales and 19.5% in median price. In Marathon County, sales were 21.5% higher and prices climbed 9.7%. Washburn County recorded 15.8% more sales on prices that soared 29.6%.
It's possible that 2006 will chug to a new housing resale peak, if only by 2% or so, Clark said.
But Timothy Riddiough, director of the University of Wisconsin-Madison's Center for Real Estate, has some doubts.
"Wisconsin's economy is doing well, though I wouldn't say it's going great guns," he said. "The stars aligned well for real estate prices to go up quickly - we had very low interest rates and the stock market wasn't getting any traction. But things have changed. House prices tend to react slowly at first, as people pull out of the market. It could be that our situation is worse than it appears."
If so, we're better positioned than the East or West Coasts, he said.
"The coasts have more volatility in their transactions. They go up faster than us, and go down faster. We tend to a slow, steady upward trend," Riddiough said. "But if everything goes well - interest rates don't rise too fast and the economy stays strong - we'll get through this fast run-up in prices without any bubble popping."