Jim Mulleady

The Milwaukee Journal, in their quest to be the newest version of "nattering nabobs of negativity" published an article stating that Wisconsin home vaules "only" increased by 1%. In a nation where housing has lost value in most markets, Wisconsin homeowners actually experienced a value increase. Shouldn't that be good news! You did not lose money! You did not earn as much equity as you did in years past but you did not go in the negative direction!

Here in Vilas and Oneida Counties, we fared even better. The Department of Revenue just published values for 2007 and Vilas County showed a 3.2% increase. Oneida County did even better with a 5.6% increase.

The Vilas County News-Review was negative as well. Their spin was "just a 3.2% increase and a 5.6% rise in Oneida". I spoke with Kurt Krueger of the News-Review and his feeling was that the growth was poor relative to previous years. I complained that growth relative to the rest of the country appears to be terrific! He agreed with me that the choice of of the word "just" was unfortunate.

Signs of life? The units sold in the month of May are the highest since January. 128 units were sold compared with 158 in January. Only 53, 70, and 77 units sold in the months of February, March and April of this year. All of these months were well off the previous years of 2004-2007. However, it is positive news as we enter into the summer selling season. This is traditionally the busiest time of year as the sold units tend to peak in the late summer.

The optimism continues on the listing side as we saw 630 listings in May. That compares with 639 in 2007, the two highest months in the last 5 years.

The Days On Market Report continues to show the large gap between average list and average sell. On the water home average list is over $116,000 over average sold list. That is indicating that we have a lot of inventory that the market is not buying. What is a bit of a concern is the volume of waterfront being sold remains quite low. Only 19 lake homes were sold in all of Vilas and Oneida Counties in May.

Days On Market Report

Active Listings

On Water Off Water

Avg. DOM 169 195

Avg. List $522,223 $178,297

# of Listings 765 757

Sold Listings

On Water Off Water

Avg. DOM 117 179

Avg. List $405,968 $127,414

Avg. Sell $372,184 $121,880

Sell/List % 91.6% 95.6%

# of Listings Sold 19 45

The construction industry should be looking up as 60 vacant lots were sold in May. That is a healthy sign.

Overall, there appears to be optimism as we head into the summer months. Markets in the southern part of the state are reporting brisk traffic including Wisconsin Dells, another recreational market. Hopefully, gasoline will stabilize. It will be an interesting summer. Considering the inventory, the historically low interest rates and the pendulum clearly in favor of the buyers, it is an ideal time to be a buyer.

Real Estate values in Vilas and Oneida Counties do not appear to be falling. However, volume by every measure is down from 25% to 35%, depending upon area. The question is why?

One possible explanation may be simple economics. We all were taught that when demand remains constant and supply increases that prices should fall. Conversely, when demand remains constant and supply falls, prices should increase. Lakefront property is usually owned by affluent sellers who can choose to "ride out a buyers' market." They can decide not to reduce price and continue to enjoy the benefits of lake home ownership.

In these instances, the laws of supply and demand still apply. Supply has remained relatively constant. I think that most practitioners in the area would agree that the number of buyers is reduced thus creating a lower demand. Theoretically, that would result in lower prices. However, lower prices have not yet been detected. Most Sellers have been reluctant to lower the price. So, Buyers have been choosing to walk away resulting in fewer sales.

This is an unusual moment in history. I cannot recall a time when there have been deflationary pressures but no corresponding price decreases. The free market continues to exhibit its power over the market by reducing sales volume.

	Q1	Q2	Q3	Q4	YTD
2008	108
2007	165	250	341	209	965
2006	165	301	329	271	1066
2005	198	348	448	243	1237
2004	106	212	273	187	778
2003	89	161	270	182	679
2002	83	108	247	175	613
2001	84	166	214	116	580
2000	86	0	179	148	574
1999	74	153	218	147	592
1997	73	148	203	124	548

The above data is taken from the Wisconsin REALTORS Association site (www.wra.org). This represents home sales (units) in Oneida County. The data below shows the median price for home sales in Oneida County. Its difficult to notice a trend other than the number of units are back to 2004 levels. What the data does not show is the significant price difference between on-water and off-water homes. There is data elsewhere in this blog detailing this.

2008	$102,500
2007	$112,500	$115,000	$112,000	$115,000	$114,300
2006	$103,300	$118,000	$128,600	$132,500	$123,300
2005	$113,300	$117,100	$120,000	$140,000	$122,900
2004	$120,000	$148,900	$144,000	$160,000	$144,400
2003	$133,300	$140,000	$146,700	$144,000	$142,900
2002	$103,300	$132,000	$145,000	$136,900	$136,400
2001	$105,700	$114,300	$124,400	$138,500	$122,000
2000	$88,300	$0	$121,600	$120,000	$111,300
1999	$90,800	$81,300	$104,400	$125,600	$95,600
1997	$70,800	$81,000	$81,900	$82,700	$80,200

	Q1	Q2	Q3	Q4	YTD
2008	72
2007	123	208	253	152	736
2006	131	233	269	209	842
2005	143	255	345	244	987
2004	71	147	199	142	559
2003	71	140	203	138	528
2002	42	142	194	128
2001	24	111	161	96	392
2000	66	0	145
1999	65	122	165	140	492
1997	43	125	194	129	491

The data above is from Wisconsin REALTORS Association Website www.wra.org. This represents the number of home sales in Vilas County. The chart below represents the median home price.

	Q1	Q2	Q3	Q4	YTD
2008	$100,000
2007	$153,300	$140,000	$175,000	$137,100	$150,000
2006	$112,000	$137,500	$153,300	$162,900	$145,000
2005	$113,300	$120,000	$166,700	$172,000	$150,000
2004	$186,700	$177,800	$216,700	$200,000	$196,000
2003	$150,000	$148,900	$182,200	$205,000	$175,000
2002	$174,700	$150,000	$166,700	$170,000
2001	$180,000	$142,200	$145,000	$175,600	$151,100
2000	$125,000	$0	$153,100
1999	$84,800	$93,200	$130,500	$136,500	$100,000
1997	$77,500	$107,800	$112,900	$100,800	$103,000

Its difficult to recognize a trend from the data other than the number of units sold is back to 2004 levels. What the chart does not show is the significant price difference between on-water and off-water homes. That can be seen in other areas of the blog. Obviously, there were not many lake homes sold in the first quarter of 2008.