I thought it might be interesting to take a quick look at how the housing market for Dane County in January and February of 2009 stacked up against the same months in 2008 by pulling some data from the South Central Wisconsin MLS. After all, it's important to examine at the facts when we're hearing so much bad news about the economy and the housing market day in and day out. As the old saying goes, all real estate markets are local - so we really need to be focused on data specific to our local market in order to understand what's really going on.
Here's how the numbers stacked up for Dane County (all data, unless otherwise specified, includes single-family homes and condominiums)*:
Jan 2009 vs Jan 2008 - Dane County
The number of listings decreased by 26.8%.
The number of sales (including condos) decreased by 36%.
The average sale price increased by 3.5%.
The median sale price decreased by .48% (less than 1%).
Feb 2009 vs Feb 2008 - Dane County
The number of listings decreased by 11%.
The number of sales (including condos) decreased by 30%.
The average sale price decreased by 8.6%.
The median sale price decreased by .36% (less than 1%).
So, what can we draw from just four months of data? Probably not much. But there are a few things happening worth noting.
Isn't it interesting how new inventory came on the market at a slower rate in January and February of 2009 compared to the same months in 2008? This apparent slowdown in the growth of new listings may be serving to counterbalance the lower sales volume we saw in the first two months of 2009 compared to 2008. Why? Because the average sale price climbed, at least in January. (Note also that the inventory increase from January 2009 to February 2009 for Dane County occurred at a slower rate than the inventory increase that occurred over the same time period in 2008.) Perhaps also noteworthy is how this February's year-over-year sales slowdown occurred at a much slower rate (less than half) than January's year-over-year results.
Hmmm. Is the slowdown in inventory growth an indication of the start of a housing turnaround in Dane County? Or is February's year-over-year decline in average sale price an indication of just the opposite? It's too soon to tell but clearly some key factors are at play: lower inventory, lower asking prices, an $8K tax credit, and mortgage rates hovering at historic lows. With so many incentives and inventory slowing, is it possible we'll see a more balanced market (vs the current buyer's market) sometime in 2009? Or is this just wishful thinking? I think one strong indication of a possible turnaround is that in addition to much slower growth in inventory, the median sale price for year-over-year January and February 2009 increased less than one half of one percent. If inventory continues to decline at an increasing rate, prices will eventually have to go down. That's just the law of supply and demand at work.
As of today, April 1st (no foolin'!), there are 2,634 homes on the market in Dane County. This translates into an absorption rate of 7.8 months. That means that based on last year's sales, it would take 7.8 months to absorb all the single-family homes in Dane County provided sales continued at the same rate as 2008. This is good news when you consider that a balanced market starts at just under six months. The condo market is a little different however. There is still sky high inventory available in Dane County. The 2,062 condos currently on the market in Dane County will take 19.2 months to absorb if sales continue at the same pace of 2008. (Ouch.)
What do you think? Is the Dane County housing market poised to recover in 2009? Do you think the market has hit bottom yet or will it get worse? Feel free to share your viewpoints and comments - we'd love to hear what you think.
For more information about the $8K tax credit or housing statistics for specific cities, towns or neighborhoods in Dane County, please call (563) BUY-SOLD (563-289-7653) or send us your questions via this short contact form. We're always happy to help!
*Source: South Central Wisconsin MLS