Mike Ivey's Business Beat: Your home is worth less today than yesterday
That giant sucking sound you hear is the air finally going out of the housing bubble.
The latest figures from the Wisconsin Realtors Association show the median sales price down 5.3 percent statewide during the third quarter of 2008, dipping to $160,000.
Not that falling prices are such a bad thing.
"It's important to remember that a modest downward price adjustment is healthy in a soft market," said Bill Malkasian, WRA President. "This is one of the things that will eventually turn this market around."
Just when that will happen nobody knows.
In the Madison area, more than 10 percent of homes sold in the third quarter were sold at a loss, according to a national survey. That means the homes were sold for less than the previous purchase price.
The survey from Zillow.com also shows the value of homes in the Madison area has fallen by 17.6 percent from its peak in the fall of 2005.
Seattle-based Zillow, which uses computer data to estimate values in the nation's largest real estate markets, shows the current value of homes here averaging $216,000 -- down from a peak of $262,000. Zillow also says nearly 57 percent of homes in this market have lost value in the past year.
But John Deininger, executive vice president of the Realtors Association of South Central Wisconsin, doesn't think values have gone nearly as far south as Zillow suggests. He said actual sales booked through the Multiple Listing Service are showing only a slight decline -- from a median price of $250,328 last year to $248,101 today.
"That's less than a 1 percent decline," he said.
Zillow stands by its numbers, however.
"We use the best available information to gauge market trends," says spokeswoman Whitney Tyner.
In this case, it appears Wisconsin is just now catching up with the rest of the country in terms of falling values. Some markets in Arizona, Florida and California, where values have fallen 30 percent or more, are now seeing an uptick in sales.
Tough times at Tomo
A year ago, it was the darling of the local high-tech scene.
Today, TomoTherapy Inc. has seen its share price plunge to less than $3 from a high of $20, with a California investment group now calling for changes at the Madison-based medical equipment maker.
Avalon Portfolio LLC, which owns about 4 percent of TOMO shares, this week sent a letter to Tomo's board of directors urging a sale, joint venture or licensing deal. It said "a series of strategic missteps by TomoTherapy management has virtually squandered its technological and market leadership" and accused the board of "making decisions without a full understanding of the (strategic) options available."
TomoTherapy posted a net loss of $26 million on revenues of $118 million during the first three quarters of 2008. That is down from net income of $5.8 million on revenue of $154 million during the same period in 2007.
Those Lycra guys
A couple of items of note on the bicycle beat:
First, Jack Hirt is stepping down as executive director of the Bicycle Federation of Wisconsin to take a part-time advocacy role with the statewide organization. During his two years at the helm, Hirt helped the group dig out of a budget hole and refocus its mission.
"I'd like to think I'm leaving the Bike Fed in a stronger position," said Hirt, adding that having two kids under age 4 at home figured into his decision to cut his hours back.
The other is a preliminary decision by the town of Middleton not to include paved bicycle lanes in the pending reconstruction of Old Sauk Road from Pioneer Road to Timber Lane. This comes despite the fact that the town engineer said wide lanes would make travel better for both drivers and cyclists on the rolling rural roadway.
A report by Kevin Murphy in the Middleton Times-Tribune put the estimated cost of widening the road at $500,000, which was apparently more than the Town Board wanted to spend. There was also concern among some town supervisors that a wider road would bring out even more of the "Lycra crowd."
Aging boomers in tight black shorts. Yikes.
File photo
Recent figures show Wisconsin housing prices fell 5.3 percent in the third quarter this year.
