June 2011 Market Update
Welcome to the Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. This report uses market-wide data based on transactions that closed in June of 2011 and compares them to closings that took place during the same months over the past three years. Closings typically occur eight to 12 weeks after a contract is signed; for that reason, the sales activity shown here reflects actual market conditions.
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This is the final time we have to compare home sales for 2011 with home sales in years driven by a home buyer tax credit.
As has been the case for the 5 of the first 6 months, monthly sales have paled this year by comparison. June 2011 sales of 605 trailed last year by 28.4% and those of 2009 by 14.9% For the first half of the year, 2011 sales are 25.6% below those reported for the same period in 2010 and 5.3% below 2009. June sales, however, continued the more traditional seasonal market pace – higher than last month as we’ve moved from spring to the summer selling season.
Dane County median sale prices in June 2011 are 2.0% ahead of 2010 and 5.0% above 2009. Year-to-date, the median sales price continues to be slightly ahead: $205,000 for 2011 compared with $200,000 in 2010 and $202,000 in 2009. While the months supply of listings continues to be on the high end (driven primarily by lower sales totals), total active listings are approximately 3% below both 2010 and 2009, continuing the downward trend started last October. New listings in June 2011 are 8.7% less than 2010 and for the year are 15% less than the same period on year ago.
For the entire SCWMLS, sales figures for June also trailed the last two year: down 22.6% compared to 2010 and down 11.7% compared to 2009. Year-to-date, sales are down 20.6% against 2010 but virtually even with 2009 (4995 vs. 5040). New listings and total active listings also show a downward trend. Median prices for 2011 are continue to trail both 2010 and 2009 – and appear to be reflective of the market range being sought by buyers.
Sixty-one percent of all active single family home listings in the SCWMLS are priced between $100,000 and $300,000, with the largest segment (38.2%) in the $100,000-$200,000 range. From all sales of single family homes reported for June, 38.9% were between $100,000 and $200,000 with the next largest group (21.8%) being between $200,000 and $300,000. For condominiums, more than one-half of active listings (51.3%) are priced from $100,000 to $200,000. It is no surprise that 54% of condominium sales in June were reported in this same range.
The first half of 2011 has performed as many predicted: with the absence of any government stimulus, the market has struggled to find its way back. For the most part it has shown signs of a more traditional seasonal market – transitioning from winter to spring and now entering the summer selling season – versus a market artificially driven as last year. The pace of sales has not yet returned to the levels we believe to be normal.
The market continues to offer an unusual opportunity for buyers: very low interest rates; ample selection of homes in most price ranges; and reasonable prices. At the same time, the rental market has seen a marked change. Recent reports indicate that area rents have increased by double digits over the past twelve months. MG&E records show that the percentage of apartments that appear to be vacant in its service area for both the first and second quarter of 2011 are the lowest levels since 2005.
The cost of owning versus renting may favor owning under the current market conditions. There is no doubt about it, whether one owns or rents, there is a cost of providing one’s housing. Over the long term, owning looks better and better.
For the most up-to-date, comprehensive analysis of the South Central Wisconsin Real Estate market, continue to visit us here on our blog which features daily posts with timely information for our buyers and sellers.
Category: Industry News
