More Demand + Less Homes = Housing Price Boom in Wisconsin in December

MADISON, WI. — Wisconsin’s housing market ended a record-setting year with solid growth, pushing annual sales to an all-time high and driving prices up well above the pace of inflation, according to the most recent analysis of the existing home market by the Wisconsin Realtors Association.

December home sales rose 4.1 percent compared to December 2015, and median prices rose 7.4 percent to $161,000. Home sales for the year 2016 increased 6.1 percent compared to 2015, making this the strongest year for sales since the WRA recalibrated its tracking system in 2005. Median prices for the year rose to $165,000, which is 5.9 percent higher than 2015.

By comparison, the average inflation rate for 2016 was just 1.3 percent according to the U.S. Bureau of Labor Statistics.

“This has been a truly remarkable year for housing in the state with sales exceeding 81,000 units for the first time on record,” said WRA board chairman Erik Sjowall. The previous peak recorded using the current tracking system was last year when just over 76,000 homes sold. Comparing 2016 sales to the previous year, solid growth was seen in every region of the state.

The most robust sales were seen in southeastern Wisconsin, which were up 7.2 percent. “We’ve been experiencing very low inventory this past year, and the supply continued to tighten in December, which makes these record sales all the more impressive,” said Sjowall.

Statewide, there were just 4.9 months of inventory in December, with the available homes dropping to 33,560. While inventory levels naturally fall during winter months, this is the lowest level seen since the WRA began tracking these figures in late 2009.

“There are several factors that have been pushing prices up, including tight inventories, but also a solid economy, favorable mortgage rates and a very low rate of foreclosure statewide,” said WRA President & CEO Michael Theo.

For 2017, there is no doubt that mortgage rates will rise as the Fed pushes the short-term rates up tocontrol inflationary pressures in the economy. “In fact, rates have already begun to increase, rising nearly a half point between November and December,” said Theo.

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