MADISON — January sales of existing homes failed to keep pace with sales in January of last year, according to the most recent analysis of the housing market by the Wisconsin REALTORS Association. 

Continued tight inventories kept sales down and pushed prices up over the last 12 months. Specifically, statewide home sales in January 2019 were 8.9 percent lower than 12 months earlier, whereas the median price rose 3.5 percent over last January to $175,000, according to the WRA.

Chairman Jean Stefaniak noted in a release from the company that consumers should keep decreased figures “in perspective” because early 2018 was strong. 

In fact, January 2018 was the strongest January since the WRA recalibrated its data collection methods in 2007. It’s mostly due to tight inventories, Stefaniak noted. 

The state had just 3.5 months of supply, which is well below the six-month point that marks a balanced market and with continual lack of supply, no records will be broken.

Every region of the state experienced a decline in sales over the 12-month period between January 2018 and January 2019, and all but one of those regions also saw its months of inventory decline. The one exception was the south central region, which experienced a 14.1 percent reduction in sales, but months of inventory were virtually unchanged at 3.1 months of supply. The inventory levels were too low to dip much lower, leaving sales figures low. 

WRA President & CEO Michael Theo noted in the release that another consequence of low supply is continual increases in home prices.

Housing prices fell significantly during the Great Recession and didn’t begin to rebound until the spring of 2012. With so many foreclosures to absorb, the Wisconsin housing market remained a solid buyer’s market from 2012 to 2015, and it was relatively balanced through most of 2016. 

However, Theo noted, as the economy continued to strengthen and housing supply continued to decline, sellers got the upper hand, and Wisconsin has been a strong seller’s market since 2017. 

In recent months, mortgage rates have settled. The 30-year fixed-rate mortgage peaked at 4.87 percent in November, and it has dropped nearly half a percent to 4.46 percent in January. This has helped to keep the state’s housing affordable. The WRA Home Affordability Index shows the percent of the median-priced home a buyer with median family income qualifies to buy, assuming the buyer has a healthy 20 percent down payment and a 30-year fixed-rate mortgage to finance the remainder of the balance. The index stood at 206 in January, which improved from 218 in December, but was down from 227 in January 2018.

Prices follow the same seasonal patterns as do home sales, so persistent buyers will find lower prices during the winter months where there’s relatively lower demand. But closer to the summer months, buyers can expect those prices to increase. 

WRA is one of the largest trade associations in the state. All county figures on sales volume and median prices are compiled by the WRA and are not seasonally adjusted. Median prices are only computed if the county recorded at least 10 home sales in the quarter.