Report: Wisconsin home prices increase by $28,000 compared to 2022

 

MADISON Wis. (CBS 58) -- If you're looking to buy a home, you may have noticed inventory is down. Pair that with rising mortgage rates, experts say it's no doubt a challenging time.

Those realities for homebuyers reflect a new report by the Wisconsin Realtors Association that shows from Feb. 2022 to the end of last month, the average prices of homes increased by $28,000.

Despite the price increase, demand is high, and inventory is down.

Home sales fell 28.1% in Feb. 2023 compared to Feb. 2022, and the median price rose 11.7% to $262,500 over that same period, according to the report.

Typically, during the winter months fewer sellers are on the market leading to slower sales. However, this year was "especially weak" with sales falling nearly 32% compared to 12 months earlier.

"The last time we saw such weak sales was 2012 as the housing market was just starting to recover from the Great Recession," the report states.

David Clark, an economist and economics professor at Marquette University, said there are several factors contributing to this trend.

"Part of it is because the baby boomers population has delayed moving out of their homes," Clark said. "That's a huge source of housing supply."

The pandemic played a role as well. Once COVID faded, mortgages went from cheap to pricey. It impacted the construction industry too that's dealing with a shortage of workers and supplies impeding the industry's ability to build new homes, Clark said.

If the economy avoids a recession, Clark predicts it will take a while before the housing market rebounds.

To Buy or Rent?

It depends on your financial situation.

Realtors and economists say renting is traditionally cheaper as opposed to buying a home and getting a mortgage. However, they warn to be prepared for rental and housing prices to continue to rise. Also, over time, the value of a home produces profit by building equity.

Sarah Venes at First Weber Realtor advises while it can be a challenging time to buy, she said patience is key. She advises if you plan to stay in the same location for a few years, a mortgage can be cheaper compared to renting.

"The people who have bought over the last few years that were a little nervous to buy, a little worried about where this market is, those people have a ton of equity in their homes," Venes said. "Some of them just put 3% down and they can walk away with several thousands of dollars more even if they didn't do anything to the property."