A lack of housing inventory hindered Dane County home sales in September.
In September, 591 homes were sold, compared to 592 in September of 2014 for a drop of 0.2 percent.
Meanwhile, home sales in the Wisconsin Realtors Association’s south central region — which consists of Columbia, Crawford, Dane, Dodge, Grant, Green, Iowa, Jefferson, Lafayette, Richland, Rock and Sauk counties — were up 5.4 percent, with 1,291 homes sold in 2014 compared to 1,225 in 2014.
Statewide, September home sales increased from 6,250 in 2014 to 6,944 in 2015, an 11.1 percent jump.
Dane County has 4.4 months of available inventory, according to economist David Clark of C3 Statistical Solutions, who is also an economics professor at Marquette University. That compares to a statewide average of 8.1 months. In the top metropolitan areas, the inventory is six months, compared to 13.4 months in rural areas.
“That may well be what has constrained their sales in September. They simply don’t have the available supply that exists in other areas of the state,” Clark said.
Year to date, statewide home sales increased 12.6 percent with 59,551 in 2015 from 52,909 in 2014. While September sales slumped, Dane County home sales were up 12.7 percent with 6,524 in 2015 compared to 5,787 in 2014.
Statewide, the median price of existing homes sold increased 4.3 percent over last September, which is significant considering that the market has seen virtually no inflation throughout all of 2015. “This is, of course, excellent news for homeowners, who have seen the asset value of their homes continue to rise over the last several years,” said WRA president and CEO Michael Theo. Median prices have increased on an annual basis for 41 of the last 43 months.
Theo pointed out that the tightening inventories will continue to put pressure on state home prices. “New listings are down, as are inventory levels, especially in our urban counties,” he said.
Year-to-date, median sales prices were 6.5 percent in the south central district and 4.8 percent in Dane County. Dane County’s median price rose to $230,000 compared with $219,500 a year ago.
“This is shaping up to be a very good year if sales continue at this rate,” said K.C. Maurer, WRA board chairman.
Specifically, if the pace of sales established in the first nine months of 2015 continues through the end of this year, annual sales will likely be in the range of 75,000 homes statewide.
The last time Wisconsin home sales exceeded that level was 2005, when just over 78,000 homes were sold.
The Dane County real estate picture, Clark said, is stronger than other parts of Wisconsin. “The reason is they have a much more stable labor market than any one else in the state. You have the stability of having state government there and then the largest university in the state.”
Unemployment rates for the Madison metro area and Dane County consistently rank among the lowest in the state.
In fact, according to the state Department of Workforce Development, in September, Sun Prairie and Madison had the lowest jobless rates of the state’s largest 32 communities at 2.6 percent. Fitchburg was third-lowest at 2.8 percent.
Dane County’s jobless rate of 2.7 percent was lowest among the state’s 72 counties. September’s statewide jobless rate was 4.3 percent.
It used to be the case, Clark said, that the Madison metropolitan statistical area was only Dane County. Columbia and Iowa counties were added in recent years — an indication, Clark said, of Madison’s expanding reach.
“As Madison has grown, it’s pulled more and more people from the outlying areas that are working in Madison,” he said.
Clark said home sales could be hindered if the Federal Reserve starts to raise rates by the end of 2015 or early 2016.
Now is a good time to buy a home, Clark said. “The constraining element here is going to be inventory. That’s the thing that is real challenging for Dane County. Inventories are already pretty tight. It’s better as you move further out, and that’s why those areas tend to be growing.”