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Has Real Estate Bottomed Out?
Have We Hit The Bottom?
To say that the Real Estate Market in the Northwoods has been heating up over the past couple months is kind of like saying Michael Jordan was pretty good in the fourth quarter. That is an understatement! For us Realtors who have been working through the toughest real estate market since the great depression, the past several months have been a very refreshing change. There were some signs even at the end of 2011. November and December were strong months based on the time of year. We have all noticed for many months that the calls have increased, web traffic has picked up, and responses to e-mails and mailings (like this one) are much greater.
Yet nobody wants to jump the gun and call a bottom. We have all been burned before thinking the bottom was just around the corner. Besides, there are still many bank owned properties out there and it sounds like more in the pipeline. Yet, let’s look at some of the numbers. . .
Sales (units sold) over the first quarter of 2012 are through the roof. They are better than they have been in over 7 years for single family homes. The average sales price is up for the first time since 2008. Nationally, the Pending Home Sales Index is now 12.8 percent higher than March of 2011. (if you would like to see charts with first quarter comparisons by property type over the past 7 years, contact a real estate agent.)
Good numbers. The type of numbers we have been waiting for. Although, looking at these numbers a little closer and we see that there really is only one segment of the market that is actually having the strong rebound these numbers suggest. That is on water, single family homes. The units sold are up almost 170% from last years’ first quarter and this is the best first quarter for units sold in over 12 years. Average price sold is up more marginally, 5.8% and are still down 31% from their 2008 1st quarter peak.
So you notice units sold are through the roof but prices aren’t really moving. Without prices moving, how can we really call this a bottom or the start of a rebound? If you have read my previous Newsletters, Market Updates, blogs or e-mails, you might recall what we said about the eventual recovery. Prices are a trailing indicator. When the market went down, units sold started to fall before prices. (Prices peaked in 2008 while units sold had peaked in 2006 and were down 40% in 2008) Prices hung in there while units sold were going down. It was only when the demand really came off that prices started serious moves down. Based on numerous experts, like Diana Oleck on CNBC, the recovery is going to go the same way. Units sold will increase first and only after significant inventory has been worked through and it is clear that demand is back, that will prices start making real moves up.
So are we there? Some would say the excellent weather this March is why these numbers have been so good. That could have some merit. March is a very large part of the successful first quarter numbers. Lake properties are the primary segment that is showing strength in units sold and typically in March the properties are still covered with snow and the lakes are still blanketed in ice. Yet we look at the numbers for the real story. If you look at the first quarter vs. the previous second quarters, you would find this first quarter still has more units sold than the past four 2nd quarters. So, as they say, “that dog don’t hunt.”
Like most dips; real estate, stocks, economies, or whatever, you only know where the bottom is when you are well off of it. So if you want to be right 100% of the time, you have to wait. But to me that is like the weatherman who tells me what the weather was like yesterday. Very accurate, but it doesn’t do me much good. If you are like me, you are looking for an opinion based on the information available (imperfect or incomplete as it may be). Well, for what it is worth, for the first time in 5 years, I am saying, we have hit the bottom and we are starting the recovery.
Home Sales Contracts Rise 4.1% in March
Posted By: Diana Olick | CNBC Real Estate Reporter, CNBC.com
More buyers signed contracts to buy existing homes in March than the previous month, according to a monthly survey just released by the National Association of Realtors.
The Pending Home Sales Index rose 4.1 percent from February and is now 12.8 percent higher than March of 2011.
“The housing market has clearly turned the corner,” said NAR chief economist Lawrence Yun in a release. “Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas as the year progresses.
Contract activity was strongest out West, with the index jumping nearly nine percent.
Both the Northeast and Midwest saw declining activity. Read more…
Latest Existing Home Sales Report
U.S. home re-sales fell in March but the supply of properties on the market tightened and prices inched higher, while the Philly Fed Index fell and the Index of Leading Indicators rose.
The National Association of Realtors said on Thursday that existing home sales slipped 2.6 percent to an annual rate of 4.48 million units last month. However, February’s sales pace was revised slightly higher to 4.60 million units from the previously reported 4.59 million units. Economists polled by Reuters had expected sales at a 4.62 million-unit sales pace last month.
And in a sign that the nation’s glut of unsold homes was easing, inventories fell to 2.37 million. Realtors in some markets have reported shortages of housing stock, the NAR said.
Nationwide, the median price for a home resale rose to $163,800 in March, up 2.5 percent from a year earlier.
Distressed sales accounted for 29 percent of re-sales, down from 34 percent in February, the NAR said. Read more…
WI Act 167: New Pier, Boathouse and other rule changes
WI Act 167 creates, repeals and revises rules… “relating to: the issuance of, and exemptions from, certain individual permits, contracts, and general permits for structures, deposits, and other activities in or near navigable waters; repair and maintenance of boathouses and fixed houseboats; certain notices required to be provided by the Department of Natural Resources; expedited procedures for certain plan approvals; deadlines for action on certain approval applications; and general permitting for certain wetland restoration activities.”
PIERS: 2. Notwithstanding the width limitation in this paragraph subd. 1., a pier may have an area as a loading platform that is more than 6 feet wide if the surface area of the platform is not more than 8 feet wide, it extends perpendicular to one or both sides of the pier, and it is located at the lakeward end of the pier or at the end of the pier that extends into a stream does not exceed 200 square feet.
Pier Registration requirements under 2011 WI Act 25 are repealed.
BOATHOUSES: Wet Boathouse repair and maintenance rules have been reworded and some repealed so that maintenance and repair also apply to replacement of structural components such as the roof, doors, walls, beams, windows, porches and floors. Read more…
Nonconforming Zoning Ordinances limited by new WI Act 170
Senate Bill 472 passed both houses and was enacted April 2, 2012, and published April 16, 2012.
The resulting legislation, Wisconsin ACT 170, provides significant protections for real estate owners in Vilas County and across Northern Wisconsin. The new law addresses certain shoreland zoning standards and ordinances that regulate the repair and expansion of nonconforming structures. Among other protections, the law prohibits rules that call for the removal of a non-conforming building, premises, structure or fixture by an amortization ordinance (amortization ordinances allow for a nonconforming structure to exist, but only for a period of time). Read more…
Overview on Land Use in Wisconsin at the Eagle River Inn
For Immediate Release: April 9, 2012
Contacts: The Foundation for Common Sense – 715-356-9744
Author, Scientist and Ecologist Dr. Michael Coffman
Gives Overview on Land Use in Wisconsin at the Eagle River Inn
(Eagle River,WI) – Area officials, representatives and citizens are invited to a presentation by Dr. Michael Coffman Tuesday April 17 at Eagle River Inn. This event is free and open to the public. It will begin at 6:30 pm.
Dr. Coffman is a highly respected scientist and ecologist who has been involved in ecosystem research for over twenty years in both academia and industry. He has taught courses and conducted research in forest ecology and forest community dynamics for ten years atMichiganTechnologicalUniversity–a leading forestry school in theMidwest. While there, he published a book on forest ecosystem classification in Upper Michigan andNorthern Wisconsin, which has become the standard for classification in the region. He also assisted the U.S. Forest Service in developing an Ecological Land Classification System for each of the National Forests in Region-9. Read more…
WDNR Outdoor Report from Woodruff’s Service Center
Woodruff DNR Service Center area
Panfish action is slow but some anglers are finding panfish in deeper waters and having success with small ice fishing type lures. The turkeys are beginning to show signs of the spring matting season with toms gobbling and strutting. Loons have just started to appear in the last two days and geese are establishing nesting areas.
For the full report dated April 5 click here.
Vilas County Housing Sales Statistics
The Wisconsin Realtor’s Association has published March and 1st Quarter 2012 housing sales data and Vilas County reflects some amazing growth trends! While prices are remaining relatively flat over the last three months, we are seeing a substantial bump in number of sales. Vilas County has had more sales in the first quarter of 2012 than ANY 1st quarter in the last 7 years!
Number of Home Sales
| Q1 | Q2 | Q3 | Q4 | YTD | |
| 2005 | 9 | 16 | 124 | 133 | 282 |
| 2006 | 60 | 130 | 144 | 115 | 449 |
| 2007 | 68 | 131 | 174 | 104 | 477 |
| 2008 | 44 | 84 | 93 | 82 | 303 |
| 2009 | 38 | 76 | 92 | 105 | 311 |
| 2010 | 47 | 113 | 109 | 101 | 370 |
| 2011 | 64 | 86 | 127 | 124 | 401 |
| 2012 | 82 | n/a | n/a | n/a | 82 |
Median Price
| Q1 | Q2 | Q3 | Q4 | YTD | |
| 2005 | $200,500 | $169,250 | $227,500 | $264,500 | $244,000 |
| 2006 | $177,500 | $219,000 | $236,000 | $200,000 | $210,000 |
| 2007 | $225,000 | $210,000 | $209,950 | $193,750 | $210,000 |
| 2008 | $176,500 | $159,000 | $170,000 | $212,825 | $174,500 |
| 2009 | $240,000 | $149,950 | $178,500 | $192,000 | $178,000 |
| 2010 | $195,000 | $155,000 | $218,000 | $210,000 | $189,500 |
| 2011 | $145,500 | $164,000 | $188,000 | $176,975 | $175,000 |
| 2012 | $149,000 | n/a | n/a | n/a | $149,000 |
Sold dollar volume is also growing substantially — The Greater Northwoods MLS data reflects roughly a 30% increase over 1st quarter 2011.
We at Eliason Realty of the North, Inc. are also seeing a strong upward trend in sales activity. We are noticing buyer confidence improving with thoughts that we have reached the bottom and have nowhere to move now but up.
If you have been watching the market and thinking about making a move, now may be the time! Mortgage rates are still at all-time lows making any real estate purchase that much less costly in terms of your monthly cost to own.
We encourage you to get in touch with one of our seasoned real estate agents and explore the Northwoods marketplace this spring.
Meet Eliason Realty’s Eagle River and St Germain sales agents:
Eagle River Real Estate Sales Team: John Ariola, Keith DeVos, Denise Goldsworthy, Brian Hotmar, Bob Merz, John & Diane Misina, Brenda Schmidt, Debbie VanCaster, Norm Warner
St Germain Real Estate Sales Team: Ted Gregg, Bernie Kazda, Tim Kruse & Richelle Eliason Kruse, Rick Lovdal, Chris Nickolaou
Housing Rebound featured in Barron’s this week
Click for READY TO REBOUND cover article in Barron's Magazine
Eliason Realty of the North Blog 