April 11, 2014 – Home sales for the 1st Quarter of 2014 were down 10.2% from a year earlier, and sales for March were down 14.6% compared to 2013 in the 4-county Metropolitan Milwaukee real estate market. The slowdown for the first three-months of the year is being blamed on an exceptionally cold winter.
A decrease in sales is not unusual in the winter months, and given the numerous Polar Vortexes that have descended upon the region, buyers have decided to search online before going out.
Total sales were down 333 units compared to 2013 for the quarter (2,921 vs. 3,254). Most of the drop off was in March, when sales were down 208 units compared to a year earlier. January and February were down 28 and 97 units, respectively. That is an sign of just how cold and long the winter was, each month saw progressively worse sales performance compared to last year.
Despite a slow market in the 1st Quarter, area brokers expect the market to be on par with (and possibly beat) the 18,203 unit sales of 2013, as the local economy continues to improve and expand; and newly formed households get into the market.
Listings placed on the market increased by 2.7% for the quarter and 6.6% in March, a positive sign that sellers were preparing for the spring uptick in sales.
The inventory level was 6.7-months for March, a sign of a very healthy spring market. Inventory in the 6-month ballpark is the sweet-spot for listings, because it provides an ample array of choices for buyers without applying too much price pressure up or down. However, after deducting the 1,726 listings with an active offer from current listings of 8,759, the inventory level dropped to 4.8-months.
Keep in mind that these are March numbers, and as the thermometer rises, we will see more listings added to current inventory in anticipation of a busier market in April. The cold weather just pushed off the start of the busy season by about 30-45 days.
Except for the weather, market conditions were good in the 1st Quarter. Interest rates, home prices, and active buyers are situated to fuel a robust spring and summer market.
Sellers should not assume they will get whatever they ask for, and buyers should know the days of deep discounts are gone; a REALTORS® guidance will help both parties purchase or sell a property for a fair price.
The Greater Milwaukee Association of REALTORS® is a 4,000-member strong professional organization dedicated to providing information, services and products to “help REALTORS® help their clients” buy and sell real estate. Data for this report was collected by Metro MLS, Inc. a wholly-owned subsidiary of the GMAR.