February Wisconsin home sales slip, but prices jump

February homes sales fell 2.6% in Wisconsin, but a shortage of homes on the market is leading to higher prices, a report released Monday shows.

The Wisconsin Realtors Association reported 3,566 sales of existing homes in February, down from 3,663 in the same month a year earlier.

But the median price of homes sold in the state last month rose 6.1% to $155,950 from $147,000 in February 2016.

The increase in the median price is much higher than the annual inflation rate, which was 2.5% in January, the Realtors organization noted. The slip in sales from a year ago comes amid a state unemployment rate of 3.9%, the lowest mark in 16 years. The interest on 30-year fixed rate mortgages has been around 4%.

"Needless to say, February is not a month where we see a lot of home sales in Wisconsin, but we would have expected stronger sales given the strength of the economy and relatively low mortgage rates," Erik Sjowall, chairman of the state Realtors board, said in a statement.

Only the Northeast region of Wisconsin saw February sales increase, rising 6.1%.

Sjowall put much of the blame on limited inventories of homes for sale in the state.

"Inventories naturally fall in the winter months, but these are the tightest February inventories seen since the WRA began tracking available supply in 2009," Sjowall said.

Michael Theo, president and chief executive of the Wisconsin Realtors Association, said the strong demand and limited supply have been putting price pressure on the existing home market.

Median prices have been increasing at an annual rate of more than 6% since September. The market has shifted from a buyer's market two years ago to a strong seller's market today, the Realtors said.

The thin inventory is most pronounced in the more-urban areas of the state.

"We've been lucky to have low mortgage rates and modest improvements in income to help offset the steadily rising prices, but affordability will almost certainly suffer when the cost of credit increases," Theo said.

The state residential real estate market started 2017 with a 1.7% sales increase in January from the same month a year ago.

During the full year 2016, sales rose 6.1% and the median price grew 5.9% in Wisconsin.

© 2017 Milwaukee Journal Sentinel. Distributed by Tribune Content Agency
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