‘Flood Of Homes Impacting Prices’ In Wisconsin
The Capital Times reports on the housing glut in Wisconsin. “The flood of homes and condominiums hitting the market in Dane County appears to finally be impacting prices, according to the latest statistics from the Realtors Association of South Central Wisconsin. The 1,133 homes and condominiums listed for sale for the first time with the South Central Wisconsin Multiple Listing Service in February were 9.2 percent more than a year ago.”
“That brought the total number of homes and condos listed for sale to 4,523 at the end of February, 75.3 percent more than a year ago and 113.7 percent more than February 2004. The 356 reported sales in February were 8.2 percent fewer than a year ago.”
“The median sale price in February of $215,445 was just 2.6 percent more than a year ago. ‘It’s pure basic economics’ of supply and demand, said Kevin King, RASCW executive director. The booming inventory is mostly due to the increasing number of condo developments in the Madison area, King said. ‘It seems like you can’t go too long without reading or hearing about another new condo project,’ he said.”
“The south central Wisconsin market has been stronger outside Dane County than in the county. King attributed that to the much lower prices in surrounding counties. ‘When you look at the median prices for the counties surrounding Dane County it’s almost $50,000 at a minimum lower,’ he said. ‘And depending where you work in the county your commute out of Dane County can be relatively short. ‘This is going to be a very interesting year to see unfold,’ King said. ‘I don’t know what to expect.’”
We don’t hear much from Wisconsin. Any local input is appreciated.
There is an interesting study by Case & Shiller which compared the price level in Wisconsin to CA and MA in past booms. The take home messages of the study:
1) Wisconsin does not boom like the coasts.
2) While CA has seen its average home price to income ratio swing from 6 to 9 and back, Wisconsin’s stays between 2.1 and 2.4 forever.
So this time is really, really different…
If you care little for reading academic economic literature, just skip to the graphs at the back of this report…
http://tinyurl.com/g69s9 (Caveat: the file is a .pdf)
I grew up in SE Wisconsin and now live in Chicago. I visit WI very frequently and I can’t tell you how shocked I am by all the rampant construction.
There are two markets — the Chicago $MMMM summer home market, and the markets for the locals. Both are out of control. Lake property has trippled in the past few years. What is more surprising is the new construction for the locals. Hundreds and hundreds of houses going up everywhere. There is no growth in the local economy, aside from building, of course.
And then there is Madison, which does have a lot going for it and is a very cool/hip place, but how people there could ever hope to afford NY/CA prices I will never understand.
LOTS of for sale signs all over the place right now, btw. Could devastate the economy here.
Its been my hunch all along , the frenzy was Nation wide .
The condo craze seems to confirm that. How likely is it that so many places simultaneously decided to radically change the housing base? I once posted on condo projects booming in a Montana town.
Who has been holding all the inventory in non-bubble markets like Wisconsin? If speculator were holding it, why didn’t prices rise out of control like they did in bubble markets?
I was in Grand Rapids, MI last week. Tons of “Luxury Condos” going up from what I could see. One building had a big sign on the side that said “Tax Free Condos”. Wonder what that meant.
The rolling boom in prices is now being followed by a rolling boom in inventory.
Anybody want to buy a condotel, cheap?
they’ve got the spin down to a science. building inventory, reduced sales and it all points to a “normal” market.
they mean normal circa 1930’s….
But I thought that everyone wanted to live in Wisconsin because of the great weather, access to beaches, and happening downtown scene. Or did I have that mixed up with some other bubble market?
Madison, like all bubble cities, has many unique qualities that make it different from all other bubble cities.
Wisconsin has the best schools in the country. ;o)
Actually, Illinois does, even factoring in the city of Chicago (which of course brings down the average).. But we still like to visit Wisconsin often.
Wisconsin does have the lake beaches. I am sure many folks are there in the winter with the chilly winds blowing off of the lakes.
or is WI too far from the lakes. not sure since I have never been there. But, they have all that cheese and dairy farms.
Wisconsin has thousands of lakes in its northern third. It is a big place for Chicagoans and Milwaukeeans to vacation in the summer. The property values up there have skyrocketed. Many of the little blue-collar fishing resorts have been turned into condos, and they’re actually trying to sell time shares, too. Who is going to buy the second week in November. Anyone? Anyone?
A lot of the little cottages have been torn down for enormous “log” cabins sold in the hundreds of thousands of dollars. Also, lakefront property taxes are very high.
It’s really kind of sad. I spent my childhood vacations up there, a my grandparents lived there, and it has changed so much. When I was a kid, it was mostly a blue-collar and middle-class vacation place. We take our kids up there now, and the amount of money being thrown around at property is astonishing. I always dreamed of owning a little lake cottage, but I don’t know how anyone could afford it now.
Timeshares signal the top (at least from the last Bubble). I was in junior high at the time and remember vacationing in Eagle River in some new timeshare (some were for rent), we rented. I remember my parents being excited about how nice it was, the owners (people who “owned” the timeshares) mentioned how shortly after they bought, reality set in once they set the real association fees. Just like all the new condos (the builder keeps the fees low while they control the association), then the “owners” take control and realize they will have to raise fees by 300%. The “owners” were not very happy. Although the resort was nice, who wants to lock in a high price when you can easily rent something nicer and get to pick when and where you will vacation for less money?
These timeshares (perhaps not this specific one) were sometimes sold for negative money, as you were obligated to pay the upkeep. Ouch.
OT -from Craigslist LA
Looking for an investor who will lend $75k to $100k for one year
http://losangeles.craigslist.org/rfs/144221988.html
what’s the catch? that’s a killer neighborhood
LMAO…”If I default, you just made $600K min”.
No, I just lost $100K. And the only reason he would default is if property values tank, in which case current value is a moot point.
The types of idiots that would give some moron off of CL $100K are the people I really hope burn…
How close is Wisconsin from Detroit? 100k GM employees could be getting earlier retirement pay.
Do they use get out cash to pay down their mortgages, vacation or save it for a rainy day?
For sure they are not buying new homes with no future expectation of income.
lol.
There is no shortage of cabins and lakefront property in Michigan. I guess maybe the realtwhores could claim that Upper Michigan is “lake locked”….
Wisconsin has long been a retirement destination for people from the coastal regions of Florida and CA who move north in search of cold, snow, and desolate prarie.
Property values in Wisconsin are likely to rise as wealthy Baby Boomers sell their beach homes in Palm Beach, Bel Air and Malibu so they can retire to abandoned dairy farms in Wautoma and Janesville.
LOL. As a native of Illinois, Wisconsin is a beautifal state. Lots going for it.
David
Bubble Meter Blog
i’m on board with that. my family used to vacation in eagle river, WI. beautiful in the summertime, and not so bad in the wintertime because snowmobiling and other wintry stuff is going on.
but i thought the boomers were all headed south to fla and west to calif.
do you think they’ll wave at eachother as they cross paths?
Damn you… That made me spit root beer all over my monitor and keyboard..
I’d take Wisconsin any day over Florida. For real.
So would I. My grandparents moved from a resort area of Wisconsin to Tampa when they couldn’t take the winters anymore. They were never really happy in Florida. My grandmother was a native Cheddarhead and didn’t want to leave.
LMAO
hey ben, have you noticed that the site is super slow loading sometimes?
9% what amatuers !
test
Ancient Chinese Curse:
“May you live in interesting times”
There is another one: “Interesting times is made by interesting people.”
OK, I made this one up.
I’ve got an awesome blurb from Minyanville to give you all after the close. I’m going to have to retype it because I can’t cut and paste from the realtime IM. But you all, especially the Californians, will love it. Stay tuned.
OT: “Depression-Era” Foreclosures in My County (Allegheny, PA)
I thought I’ve been seeing alot of foreclosures. I see them every week or so in the classifieds, been reading them since before the recent talk of the end of the bubble. They say there isn’t one here, but in certain areas, the prices are unreal. Pittsburgh’s a cheap place to live, and when I started seeing homes for $400-$800K in the burbs, I knew it was insane. These are in areas that were $100k in 1980. I remember vividly, since I used to think that was a lot of money, when I was a kid.
100k is still a lot of money. When I was a kid, I thought a HUNDRED was a lot of money.
The reason for this is that flocks of Canadians are going to move to WI and their strong Canadian$$$ are going to make us all rich.
The Canadians are coming! Boo!
Boy, are we rich and we’re buying! There are, well, millions, er, hundreds of us coming with our oil wealth and big fat C$ filled wallets!!
Wait a minute!
I thought it was the other way around. Millions of rich Americans fleeing Bush and Co. and keeping our Vancouver housing bubble afloat! Maybe the Canadians those Americans are displacing are fleeing, in turn, to WI?
Upper Wisconsin and Canada have similar accents. You probably wouldn’t be able to spot which is which. Good people.
a little OT - West Chicago suburbs still have lots of greater fools. Just this afternoon saw car pausing at for sale signs and taking brochures. Also rehabber was outside working on his place. Just put his for sale sign up. I wonder what insane price he is going to ask. Also have seen more contract pending and sold sign recently.
I take the brochures all the time. It’s interesting to note that some houses have an asking price of $280K and others (very close in size, condition, & all in the same neighboorhood) have an asking price of $380K. $300K- $325K seem to be the norm. These same houses would have sold for 150K 3 years ago.
One of the houses for sale for $380K I know for a fact sold for $292K a year an half ago. They have been trying to sell it for about a year now (they were asking $369). But it didn’t sell so of course you up the price. I’m so tempted to go offer them $180K.
yep chicago suburban RE market is going steady as it used to be…the DOM has increased but houses priced higher than last year are selling as long as they are in livable condition…I getting little worried now..looks like this craze may continue for few more years here in midwest
“How far is Wisconsin fron Detroit?” Jeezuz, you insular West Coast people.
Kudos for finally addressing the bubble in Illinois/Wisconsin, it’s high time.
I presently live in Eagle River, Wisconsin. We went from 307 listings in 54521 on March 1 to 393 as of today. I pity the fool who buys lakefrontage up here…its busting big time. Too many equity loans from Chicago bought lake homes here and now their up for sale.