(Source: Paul Gores Milwaukee Journal Sentinel (MCT) — Wisconsin’s housing market continued recovering in August as sales of existing homes rose more than 20% and the median sale price inched up for the sixth consecutive month.
Real estate professionals said Tuesday that multiple offers on move-in ready properties are increasingly common, and that some communities actually could use more quality properties for sale.
Real estate agent Tammy Maddente said the housing market is well into the first phase of the recovery, which started with investors snatching up many foreclosed and other distressed properties, followed by buyers making offers on their first home. Now, sales are occurring at all price levels, she said.
“The second part of the recovery is when prices start to rise, and they are starting to,” said Maddente, executive vice president of First Weber Group. “All the predictions were that we’d be flat for 2012, but we’re seeing a slight increase, albeit very slight. Until we can absorb all the distressed property, that’s going to be the case.”
Data released Tuesday by the Wisconsin Realtors Association shows the median price of homes sold in August increased 2.9%, to $144,000 from $140,000 in August of 2011. There were 6,419 homes sold in August, up from 5,335 at the same time a year ago.
Through the first eight months of 2012, sales were up 20.7% from the same period a year ago, and the median price had increased 0.8%.
David Clark, a Marquette University economics professor who analyzed the data for the Realtors, said with a half-year of rising median sale prices under its belt, Wisconsin’s housing market is improving.
“I think in terms of prices we probably have bottomed out, barring a double-dip recession,” Clark said.
However, with an overabundance of homes still for sale, big increases in home prices aren’t likely.
“There is plenty of inventory to keep prices moderate,” Clark said. “Interest rates are at historically low levels, and I do think if the economy intensifies, that will start putting upward pressure on prices. We are seeing very modest upward pressure right now, but this is with an economy that is growing at a pretty slow pace.”
Slow and steady
Jim Smith, president of W.E. Smith Realty Inc. in Appleton, said he prefers a slower price rise to big price surges.
“The median price is gradually rising, and from a real estate standpoint, I think that’s actually healthier than if you took a 10% or 15% jump, because I believe they are sustainable,” Smith said.
The inventory of homes for sale has dropped more quickly in counties with bigger cities than in rural areas, the state Realtors said.
“It’s clear that in spite of slight upticks in the state unemployment rate over the last two months, the housing market continues to grow, and it’s growing at a brisk pace,” said Michael Theo, president and chief executive of the Wisconsin Realtors Association.
Smith said his office had two homes with multiple offers last week and houses even have found buyers on the same day they were featured at open houses.
“That is a very unusual phenomenon that hasn’t happened a lot recently,” he said.
Gary Swittel, of ReMax Realty 100, said appraisals for mortgage purposes still can be an issue hampering sales. Appraisals based on sales of surrounding properties help lenders put a value on the home.
“I think the challenge at this particular point is getting homes to appraise for what buyers are willing to pay,” Swittel said.
Swittel said he senses “a shortage of good, move-in ready property in certain areas.” Among them: Greendale, Wauwatosa, Hales Corners, New Berlin and Pewaukee.
“The nondistressed properties – properties that are in move-in condition – they are seeing multiple offers. We’re seeing a lot of that,” said Maddente.
In the beauty contest of home sales, houses that need some work generally take longer to sell, Smith said.
“They are still selling fixer-uppers, but not like they used to,” he said.
©2012 the Milwaukee Journal Sentinel
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