Tight inventories and strong demand fueled by a healthy economy and rising interest rates kept home sales in Dane County in a strong seller’s market through the first two months of this year, according to an economy professor who provides data for a state Realtors group.
Although Dane County has the second tightest inventory of homes for sale in the state, home sales jumped 6.6 percent through February compared to the same period in 2017, data from the Wisconsin Realtors Association show. They also show that the median sales price in the county jumped 8.9 percent to $268,000, which was the second highest among the state’s 72 counties.
Home sales increased 4.7 percent across the state compared to the first two months of 2017, and the median price jumped 7.4 percent to $155,500, the data show. Sales increased in five of the state’s six regions, and the median price increased in all six regions.
“There’s a pretty high demand for homes and a pretty static supply. Something has to relieve the pressure and increased prices is the thing that does it,” said David Clark, a professor of economics at Marquette University.
The rate on a 30-year fixed mortgage increased by about a half of a percentage point from the first week of January to the first week of March, when it hit 4.46 percent. Since the Federal Reserve is raising short-term rates as well, potential borrowers are worried that long-term rates will continue to rise, according to Clark.
“That’s not necessarily true but that said, it’s getting people off the fence (and making the decision to buy a house),” Clark said.
It is taking an average of just 2.8 months to liquidate all the homes for sale in the state’s 26 urban counties, based on sales over the last 12 months, the Realtors’ data show.
“Since six months is considered the balance line between a seller’s and buyer’s market, that shows you just how strong this seller’s market is right now,” Clark said.
La Crosse County has the state’s lowest inventory rate at 2.1 months, and Dane County is second at 2.2 months, according to Clark.
“What that means is Realtors don’t have time to relax. As soon as something shows up (for sale) that will suit the needs of a buyer, they better get them to see that house very quickly,” Clark said. “You can’t wait a day or two to call a client because one or two offers could be made in that time. Realtors have to be on top of their games 100 percent of the time these days.”
The statewide inventory rate is 3.7 months and the rural counties’ rate is 5.9 months, according to Clark.