Erik Sjowall : Bunbury & Associates Realtors Blog

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August 2012 Are we There Yet?

September 18th, 2012

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 August of 2012 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.
Are We There Yet?
Sin
middle of last year – June to be exact – Dane County monthly home sales have exceeded those of the prior year with just one exception (and that month was a tie). Each month the question is posed: has the housing market recovered? And each month the answer is: recovery is a process, not an event.ce the

Well, we must be doing well in the process as August sales for Dane County are up a substantial 28.6% for the month and now stand 24.3% ahead of last year. Six of eight counties within the SCWMLS primary region are also ahead for the month and all counties continue to exceed in year-to-date numbers. The entire SCWMLS is ahead of 2011 by 23.2%.
Another bright sign for August is that the median price for Dane County sales is slightly ahead of last year. This is not totally unexpected as inventories of active listings have fallen by more than 20% over last year while sales have increased. In breaking this down further, the months supply of inventory for single family homes in Dane County stands at just 6.9 months, while condominiums have less than 12 months of supply. Six months of supply is generally regarded as representing a balanced market between buyers and sellers.
An additional benefit to having values rise is that more home owners are finding equity in their homes again, after being underwater on their mortgage for the past several years. This is important as we attempt to evaluate the impact of distressed sales (including REO and short sales) on the market. In Dane County, distressed sales reported for August represented 11% of single family sales and 22% of condominium sales. These figures have been fairly consistent since May when we first began collecting this information. Cash sales – which often represent investor activity-remained at 20% of the total sales.
As we enter into the fourth quarter, the market place continues to offer outstanding opportunities with respect to interest rates and affordability. More and more consumers appear to be regaining their confidence and are entering the home purchase area once again. So – are we there yet? Probably not but we are moving closer.

We will be examining these statistics in further detail over the next week in a series of blog posts. Until then, download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. We believe this guide will be a useful tool for you, providing local statistics, industry insight, and buyer and seller tips.

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July 2012 and the Beat goes on!

August 20th, 2012

As has been the case since June 2011, Dane County home sales have equaled or surpassed those of one year ago, with July sales rising more than 25%. Year-to-date sales exceed last year by almost 23%. All eight counties within the SCWMLS primary region are ahead of 2011 with the total sales up by 22%.

New listings for the July increased slightly in both Dane County and the SCWMLS overall – most likely reflecting building confidence in the market. But with the increase in sales, inventories continue to be reduced – with total listings in Dane County 21% less than one year ago (and 15% less over the entire region). The inventory of single family homes in Dane County available for sale is now less than 7 months and down to 10 months for condominiums. Many consider a six month supply of inventory to be a balanced market between buyers and sellers.

Median prices for Dane County single family homes were 5% below one year ago while Dane County condominiums were off 7.5%. When comparing prices for the most recent twelve months with those of one year prior, single family homes are trailing by 3% and condominiums continue to be 4.6% below. On the other hand, for the first 7 months of 2012, median prices in all counties except Dane and Columbia (down 1.8%) are ahead of 2011.

It appears that investors may have returned to the market a bit. After falling for 2 consecutive months, cash sales increased once again while the use conventional financing fell. The number of REO and short sales reported in July were the same as last month for single family homes in Dane County and fell from 32 to 18 for condominiums. Overall, these sales represent 12.6% of all reported sales in the county for the month.

What’s ahead? Favorable factors are still present – particularly with respect to mortgage rates and affordability. Showing requests in July continued to exceed significantly those of last year. A recent headline in USA TODAY read “If You Can Pull It Off, Buy A House.” Home prices in 18 of the 20 cities in the S&P/Case Shiller index recorded gains. Is it time that prices in Dane County start to show signs of rising as well?

We will be examining these statistics in further detail over the next week in a series of blog posts. Until then, Download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market

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June 2012 Market Update

July 13th, 2012

For twelve consecutive months, Dane County home sales have risen over the year before. For June,
combined sales of single family and condominium homes rose more than 27% and for the first half of
2012 are 21% ahead of 2011. All eight counties within the SCWMLS primary region are also ahead of last
year – not only for the month but also year-to-date. For all reported residential sales, the SCWMLS is
ahead 25% in June and 21% for the first six months.

While sales continue to rise, inventories continue to decline – both for single family homes and
condominiums. The months supply of single family homes in Dane County now stands at just over 7
months while condominiums come in at 14 months. For the 8 county regional, the combined months
supply is 9.7, down from 10.03 in May and 14+ months one year ago. As we stated previously, six
months supply is generally considered to be balanced between sellers and buyers.

Median prices for single family sales in Dane County were 2% below June of 2011 and 3% lower over the most recent twelve month period when compared to the twelve months prior. The median price for
condominiums in June was actually slightly ahead and now is 4.6% below the year-to-year comparison.
Cash sales fell for the second month in a row while the use of conventional financing rose slightly. We
will be watching the effect in the market of the recent announcement from WHEDA expanding its home
ownership program to remove the requirement that borrowers be ‘first-time” home buyers. This
program could be of assistance particularly to those potential purchasers – whether existing home
owners or first-time buyers – who do not have a substantial down payment.

One other statistic we began collecting last month – the percentage of sales reported to the SCWMLS
that are short sales or REO sales – may also help us understand where we might be in the process of
recovery in our housing market. In May, 13.2% of the total sales in Dane County were either a short sale
or REO. In June, with almost 200 more sales than the previous month, this figure dropped slightly to
12.2%.

Favorable factors continue in the marketplace – extraordinary affordability due to extraordinary low
interest rates and moderate prices. June showing requests in 2012 were 49% higher than one year ago –
a positive indicator of continued activity. Now if we could only get some rain!

We will be examining these statistics in further detail over the next week in a series of blog posts. Until then, download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. We believe this guide will be a useful tool for you you, providing local statistics, industry insight, and buyer and seller tips.

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Market Update – May Home Sales Up 20%

May 18th, 2012

Dane County home sales for May rose 20% over 2011. This marks the eleventh month in a row that monthly sales have equaled or exceeded the prior year. Year-to-date homes sales are now 19% ahead of 2011, compared to 17% year-to-date through April. Monthly sales in the SCWMLS primary market area rose in 6 of 8 counties, with an overall increase of 24% for the entire SCWMLS. For the year, sales are ahead 20%.

New listings fell once again, with total active listings more than 15% below just one year ago, reaching the lowest level in May since 2005. For the entire SCWMLS, total active listings are off by almost 12%. As a result of increased sales and declining numbers of active listings, the months supply of inventory is moving ever closer to a balanced market between buyers and sellers. SCWMLS brokers and agents report that in certain areas and neighborhoods, the balance has already been reached!

The median price for May sales in Dane County for this year and last has stayed almost identical with only $1,300 separating the two. For the year-to-date, the median sale price trails 2011 slightly (off 2.7%). However, once again the median sales price for the entire SCWMLS was higher than one year ago, not only for the month but year-to-date as well.

On the financing front, cash sales fell just slightly from last month to 19% of all transactions while conventional financing rose slightly to 66% and FHA continued to be used in 9.5% of the sales. Compare this to May 2007 when cash sales were only 9.2% of the total, only 1.8% of buyers obtained an FHA loan and conventional loans accounted for 86.5% of the market.

The results of May fortify our concluding remarks from April’s report: our expectations continue to be greatly exceeded and the indicators for a continuing process of recovery remain strong – not only for our marketplace in south central Wisconsin but for the state and many, many areas of the country. An additional key factor that we note this month: of the sales reported for Dane County, only 15% are REO or short sales. This is down substantially from previous estimates of the impact of distressed sales put forth by others earlier in the year.

The unprecedented affordability continues – for now. This is an unprecedented combination of favorable market factors for buyers and sellers. How long will it last?

Download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. We believe this guide will be a useful tool for you, providing local statistics, industry insight, and buyer and seller tips.

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January 2012

February 27th, 2012

January Home Sales Off to Solid Start

Home sales in Dane County started off the year on a solid note. While for the first time in the past 7 months, sales did not exceed those of one year ago, they did not trail either. The 229 sales reported (as of February 12, 2012) is the same number as January 2011. And we are reminded that last January was the highest monthly total since 2007. Overall homes sales for the entire SCWMLS were 14% more than one year ago.

The median price in Dane County for the most recent 12 months (February 1, 2011 – January 31, 2012) is virtually even with the prior 12 month period -$206,000 compared to $207,500 – and is above that of the same period in 2009-2010 when the median sale price was $201,000. For the month, the median dropped 5.3%.

New listings in January were slightly lower but like January 2011, were significantly fewer than prior years. Total active listings continue the year-to-year downward trend, dropping for the 5^thyear in a row. For the entire region, new listings and total active listings were also slightly down. The reduction in inventory continues to move the market closer to balance in terms of supply and demand.

On the financing front, cash sales once again were a significant percentage of total transactions – this month representing 28%. This is an important number to follow as concerns regarding lending practices still being too tight persist in the marketplace.Download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. We believe this guide will be a useful tool for you, providing local statistics, industry insight, and buyer and seller tips.

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Market Update – Homes Sales End 2011 on High Note

January 19th, 2012

For the sixth consecutive month, home sales in Dane County exceeded those of one year ago, rising 8.6 over December 2010. For the entire SCWMLS, sales in December were up even more – increasing 10% over last year.

After a slow start when compared to 2010, 2011 rebounded quite well. In June, Dane County sales trailed by 25.6%; at year end, the deficit was reduced to just 6.1%. Overall in south central Wisconsin, the margin was only 3.5%.

The median price in Dane County for this year continued to track virtually even with the annual 2010 median price $206,350 compared to $207,000 – and is slightly above that of 2009 ($202,000).

New listings in December rose very slightly but for the year fell by 12% in Dane County. This continues the year to year downward trend. For the entire region, new listings dropped 8.1% in 2011. As a result, the Dane County active inventory is 9% less than 2010, and stands at the lowest year end total since 2004. The reduction in inventory moves the market closer to balance in terms of supply and demand.

On the financing front, cash sales continue to be a significant percentage of total transactions – this month representing almost 23%.

2011 sends us into the New Year with optimism. As has been noted previously, the market offers many, many advantages – especially with respect to historically low interest rates and high affordability factors. Like last month, showing activity reports are substantially ahead of this time last year. Many economists are predicting gradual recovery – for the economy, in general, and for housing, specifically. This past year – standing on its own – free of artificial stimulus programs – has provided an excellent foundation on which to build the recovery of the market, beginning in 2012.

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November 2011 – Home Sales Continue Winning Streak

December 13th, 2011

November home sales in Dane County are up 30.7% over last year – marking the 5th consecutive month of increased sales compared to 2010. In fact, 7 out of 8 counties in the SCWMLS primary market area reported higher sales, contributing to a 13.1% increase for the entire SCWMLS.

In a year with no housing stimulus programs, the gap in year-to-date sales when compared to 2010 has been cut from 25.6% in June to just 7.7% in Dane County, and from 20.6% to less than 5% for the entire south central Wisconsin region. Median sale prices continue to remain stable year-to-date in Dane County, while dipping 3% across the SCWMLS.New listings for Dane County and the SCWMLS are lower in November while total active listings continue the year-to-year downward trend in Dane County. On the financing side, cash sales represented 23.5% of the total sales compared to just 10% in November of 2005 – the height of the housing boom.

As we enter into the last month of 2011, we once again note the advantages in the market with respect to historically low interest rates and high affordability. For example, the cost of a mortgage on the purchase of a median price home today is less than 10 years ago. In November of 2001, the median price home in Dane County for the first 11 months was just under $164,000 with an average 30 year mortgage fixed interest rate of 6.85%. Assuming a 20% down payment, the monthly principal and interest payment would have been $866.25. Today, with the year-to-date median price of $206,200 and a 30 year mortgage fixed interest rate of 4.0%, the monthly P & I payment is only $787.54.

Other factors suggest a continued improvement in our housing market: showing activity in November appears to be substantially ahead of one year ago and for only the second time in the last 15 years, October sales were exceeded by November sales (the other time being in 2009 when November was the deadline of the then current homebuyer tax credit). Finally, with rental vacancy rates at very low levels, this could be a signal of future homebuyer interest in 2012.

Click here to download our full Market Update. We believe this guide will be a useful tool for you, providing local statistics, industry insight, and buyer and seller tips.

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September 2011 – Home Sales Up for Third Straight Month

October 19th, 2011

Home sales in Dane County are up 23% for September, marking the third month in a row of increased sales compared to 2010. For the entire SCWMLS, September sales are 19% ahead of the previous year. This continues to support the industry prediction that the second half of 2011 would see a marked improvement compared to last year.

The year-to-date sales gap between 2011 and 2010 has narrowed again. The SCWMLS trailed 2010 by 20.6% at the end of June. Now, at the end of the third quarter, the difference is only 7.4%. Similarly, the gap in Dane County has been cut from 25.6% to 10.8%. Nothing has changed expectations that this trend will remain for the balance of the year.

The median sale price for Dane County, representing the midpoint of all closed sales ranked from lowest to highest price, stayed virtually identical in 2011 compared to 2010 – $206,000 (2011) vs. $205,241 (2010). For the entire SCWMLS, the median sale price trails 2010 by 3.8%.

Total active listings in Dane County and the SCWMLS continue the year-to-year downward trend. Likewise, new listings are down in both Dane County and the SCWMLS for the month and year-to-date.

In breaking down the Dane County numbers, single family home sales and condominium sales are each up over 20% for the month. The largest drop in total active listings is in condominiums – down 12% from 2010.

The most popular price range for active listings in the SCWMLS once again is between $100,000 and $300,000 (60.2%), with the largest segment in the $100,000 – $200,000 range (38.6%). From all sales of single family homes reported for the month, 38.1% were between $100,000 and $200,000 and 18.1% between $200,000 and $300,000. For condominiums, 48% of the active listings and sales are priced from $100,000 to $200,000.

The increased activity for the past three months is encouraging as we enter into the fourth quarter of 2011. Interest rates remain at record lows, affording buyers with a historic low cost of ownership. However, demand still appears to be suppressed by federal regulations making qualification for a mortgage loan more difficult. At the same time, confusion as to the availability and qualifying criteria for home loans also appears to be holding potential purchasers back (No, 20% down payment is notrequired). In spite of the challenges yet facing our markets, we firmly believe the fourth quarter will be far better than 2010, leading us into 2012.

Please download our Market Update, our monthly examination of South Central Wisconsin’s residential real estate market. We believe this guide will be a useful tool for you, providing local statistics, industry insight, and buyer and seller tips.

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It was a Great Day for Golf!

September 23rd, 2011

Thank you to everyone who participated in our annual Bunbury & Associates golf outing at Pleasant View Golf Course. We had a wonderful day, the weather was chilling but that didn’t stop us from having a great time! To all of the golfers, thank you for coming out. We love having the opportunity to see old friends, as well as the chance to meet new ones.

A special thank you goes out to all our sponsors; A1 Funiture & Bedding, Amerispec, Robert Procter of Axley Brynelson, The Clean Advantage – Carpet Cleaning & more, Dane County Title, Fairway Independent Mortgage, First American Title Insurance, Haack Homestead Inspections, Liberty Mutual Insurance, Preferred Title, RBA Title, River Valley Bank, Select One Mortgage, TDS Telecom, Universal Home Protection, U.S. Bank, Virtual Properties, and WhirligigHD. We appreciate your help in making this event happen and those that braved the cold and sat on their sponsored holes, thank you for adding to the fun!

Please be sure to watch our Bunbury & Associates Realtors® Facebook page for photos.

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June 2011 Market Update

July 21st, 2011

To download our complete Market Update click here.

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.

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