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The local home sales figures are slowly ticking up as demonstrated by this sold home on Janesvile’s north side.
JANESVILLE Bethany and Brian Sachs put their Janesville home on the market in March.
Three days after listing it themselves, they accepted an offer for the 1,700-square-foot ranch home on the city’s northeast side.
In May, however, they learned the buyer’s financing fell through.
With their own impending move, time was of the essence, and the Sachses turned to a real estate agent.
“We had a ton of interest,� Bethany Sachs said. “We had 20 showings in two and a half weeks and got two offers on the same day.�
The experience of the Sachses, who expect to close the sale this week, is a good example of a resurgent housing market in Rock County.
Homes are selling, again, and they’re selling for more money.
That’s good news for a market that’s been struggling in recent years with a glut of foreclosed and distressed sales that have kept average sales prices low.
Sales of existing homes in Rock County surged from April through June, according to the South Central Wisconsin Multiple Listing Service, a clearinghouse of more than 500 real estate firms that provide listing and sales information.
Realtors sold 522 homes in the second quarter of this year. That’s a 19 percent increase over the same quarter last year and the second-best second-quarter performance in several years.
April-June sales were nearly 48 percent ahead of those posted in the first quarter of this year, a traditionally slower time of year for real estate agents.
“It is too early to make predictions, but the local real estate market has a comfortable feel about it right now,� said Jerry Morse, president of the Rock Green Realtors Association and owner of The Morse Co. in Janesville.
Perhaps more significant than the number of sales, however, are the prices buyers were willing to pay to close those sales.
The average sales price for the most recent quarter was $115,175, a 10.8 percent increase over the second quarter of 2011 and a 17.3 percent jump over the first quarter of this year.
“This is the first time in several years that home prices have risen substantially,� Morse said. “It could be a sign that the market has bottomed out and we are indeed recovering from four years of a down market.�
Morse said he’s not convinced the area’s inventory of distressed, lower-priced homes has been cleared to the point that the housing market is moving toward normal levels.
In fact, he said, nearly 30 percent of the homes sold so far this year were either short sales or properties owned by lenders after an unsuccessful sale at a foreclosure auction. Last year, distressed sales accounted for about 28 percent of the homes sold in Rock County.
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.
Instead, Morse attributes the increased activity to continued low interest rates, modest improvements in the local unemployment rate, favorable prices and a pent-up demand among those who have waited several years to make a decision to move.
“There have been a lot of people sitting on the sidelines for so long,� he said.
The Sachses got close to their asking price on both the offers they accepted. In fact, they listed their home at a higher price the second time around because they knew they’d have to pay the agent’s commission.
Inventory drops
While sales have increased, Morse said the local inventory for single-family homes continues to decline.
The market has about a seven-month supply of homes, which is determined by dividing the inventory of about 1,000 homes for sale by the 150 or so sales that agents have been averaging each month in 2012.
Given the current inventory, Morse said a six-month supply is considered balanced between sellers and buyers. Inventory of less than that favors sellers, while more inventory is considered a buyers’ market.
“If you’re a seller, the recent price increases should get you excited,� he said. “I’ve talked to a lot of people who say, “I know I’m not going to get what I want, but it seems a little better, now.’�
Morse said the recent improvements in the market should be an indication to buyers that they might want to be more aggressive.
“We’re seeing multiple offers coming in on a property and sales in the higher price ranges,� he said.
Local real estate agents have accepted offers on homes ranging from $30,000 to $470,000, he said.
A dozen or so homes recently sold for more than $300,000, noteworthy because the market not long ago endured a drought of sales above $250,000, he said.
Morse said financing seems to be more available, and the Wisconsin Housing and Economic Development Authority recently made changes that should help buyers who can’t meet down payment requirements on other loan programs.
The improving market also has improved morale and interest among real estate insiders. The Rock Green Realtors Association is gaining members after years of membership declines.
“Given all indications, the bottom may have been reached in our housing market, and price and activity may be primed for a continued recovery,� he said.