Property Values Break out in Badger State

In the years following the 2008 sub-prime mortgage crisis, which resulted in millions of Americans losing their homes to foreclosure, and property prices plummeting, markets in different areas of North America responded in varying fashions.

It was asked if Wisconsin real estate was in danger of “bursting” a “housing bubble,” by Daily KOs, in 2015, after the state reported a 17.6 percent jump in the number of homes sold in June of that year, compared with 2014. The publication contrasted the rapid rise in home prices with the Badger State’s “awful” employment statistics and the financial issues it faces. Even with strong growth, prices in the Midwestern state likely aren’t in bubble territory.

Badger State

Record-High Property Values

Despite this, property values in Madison hit a “historic high” in spring 2016, joining broad price markups across the state. In April 2016, the average value of a Madison single-family home had climbed to $254,593, with the inventory of available properties declining by two-thirds, over the prior 24 months.

By comparison, property values in Toronto, the capital of the Canadian province, Ontario, were barely affected by the sub-prime mortgage meltdown at all, and hit new high ground in almost every year following it. Some have suggested that property values in Toronto may be in “bubble” territory and headed for a correction, hopefully not as severe as what was witnessed in the United States following the mortgage-backed securities debacle.

Low Interest Rate Environment

It has been noted that an extended period of loose monetary policy on the part of the U.S. Federal Reserve Board, the Bank of Canada, and other central banks worldwide, in the form of low interest rates and provisions for massive supplies of currency, is likely at least partly responsible for the accompanying, almost dizzying, appreciation in home values.

Throughout Wisconsin, the number of homes sold climbed to a record of 9,960 in June 2016, as reported by the state’s Realtors Association. That month, the median sale price was $175,000, also an all-time high. So far, for January 2017, the number of homes sold came in at 3,812, up from 3,732, in January 2016; the median January 2017 Wisconsin sale price was $158,000, also up significantly, from $148,500, the year previous. The strong January data would appear to point to another year in Wisconsin real estate where market conditions favor sellers over buyers.

Sellers’ Market Expected To Continue

In April 2016, Charlie Wells, a Wisconsin Realtor described the market being so tight that prospective buyers literally needed to have an offer “written and ready to go” in order to have a chance of having it accepted, just in case they decided to make a purchase decision.

Seasonally, the number of home sales in the Badger State tends to increase as weather improves and early, determined buyers make their way into the market in March. Historically, each month following, the number of sales has increased, before peaking in June, or in some years, May or July. Strong January numbers suggest that spring 2017 may be particularly active.

Comments are closed.