Apr. 19—EAU CLAIRE — March set another monthly record for home sales in Wisconsin, but a shortage of houses on the market is expected to change that this summer.
The Wisconsin Realtors Association is predicting the shortage of homes being listed now appears like it will cool down the hot streak the residential real estate market has been on.
"We keep setting new sales records, but the inventory crisis is going to start hurting our sales, and we'll likely start seeing that this summer," Mary Duff, the association's chairwoman, said Monday in a news release.
The 5,874 homes sold last month in the state was a new record for March. But it was only 49 homes more than the previous high for the month set a year ago.
Locally, home sales in Eau Claire County were up slightly with 94 homes sold last month — up by seven from a year before.
Chippewa County experienced a slight sales decline though with 57 homes sold last month, which is three less than March 2020.
Dunn County's sales figures also slid with 38 sold last month, down slightly from 43 a year before.
Fueling Duff's prediction for sales to be weaker this summer is a deep decline in homes for sale. The inventory of homes on the market is down 35% across the state in the last 12 months, according to the WRA's statistics.
As of last month the available supply of homes — a measure of the state's inventory — stood at 2.3 months. A balanced market neither favoring buyers or sellers is six months' supply.
"There isn't a region in the state that had more than 2.6 months of available supply in March, which means all regions are classified as very strong seller's markets," Duff stated.
Current inventory levels for Eau Claire, Chippewa and Dunn counties are at 2.5, 2.4 and 2.1 months, respectively. A year ago they were at 3.8, 4.8 and 4.5 months.
As is the case when demand outpaces supply, prices have continued to rise. In March 2020, the median price of a home sold in Wisconsin was $208,500 but had reached $229,900 last month — a 10.3% increase.
"The red-hot housing market is driving prices up quickly, which is good for sellers but tough on buyers," WRA President and CEO Michael Theo said in the news release.
Prices rose more dramatically in parts of the Chippewa Valley when compared to the state average.
The median home sold for $184,950 during March 2020 in Chippewa County, but reached $215,000 last month — a 16% increase.
Eau Claire County's median sale of $225,000 last month was a 22% increase from the $184,000 it went for a year ago.
Dunn County had the biggest local price jump — nearly 27%. The median home sold there for $205,000 in March 2020, but rose to $259,900 last month.
Stiff competition between buyers is benefiting sellers, but can also pose a hazard if they don't already have a new place already lined up to live.
"It's a double-edged sword because homes are selling quickly and for top dollar, which is an advantage for sellers; but if those sellers don't already have a new place lined up, they risk becoming buyers in an overheated market," Theo said.
Aside from rising prices, another factor impacting affordability is mortgage rates that have been slowly inching up. Bottoming out at 2.68% interest on a 30-year fixed mortgage in December, the average rate reached 3.08% last month.