After a strong first quarter, consistently low inventory levels are beginning to affect the housing market across the state.
Home sales dropped 10.7 percent in April, while the median sale price increased 6.9 percent to $171,000 last month, compared to the same time last year.
New listings across the state were down 21 percent in April compared to the previous year.
“While realtors have been doing more with less for the better part of two years, eventually the lack of supply catches up with you, and that’s exactly what’s happening here,” said Erik Sjowall, Wisconsin Realtors’ Association.
There were 50,258 available homes on the market in Wisconsin in April 2015. That number dropped 28 percent to 36,173 homes available in April 2017.
The only region that saw a slight increase in sales was the central region of the state, which was up 0.9 percent.
Sales dropped 5.8 percent in the southeast region, which includes Milwaukee, where the housing supply (the time it would take to sell all of the homes on the market at given time) is only 4.1 months. A balanced market is considered six months.
“The tight inventories are not just a Wisconsin phenomenon; they are hitting a lot of regions hard,” said Michael Theo, WRA president and CEO. “
Nationally, there were just 4.1 months of supply in March 2017, and that has been relatively consistent throughout 2017, according to the National Association of realtors.
“When demand conditions are strong and supply is limited, something has got to give to relieve that pressure, and that something is the price,” Theo said.
Market prices increased 6.9 percent between April 2016 and April 2017. In southeastern Wisconsin, the median price increased from 172,000 to $187,700 – a 9.1 percent jump.
“With so many buyers chasing so few homes, homes don’t stay on the market very long,” he said.
The average days on the market dropped from 103 days in April of last year to just 87 days in April 2017.