Monday, April 23, 2012

Pro-Walker Realtors spin warm weather into hot housing

The Wisconsin Association of Realtors released their March numbers today, which showed what improving numbers for Wisconsin's sick housing market. Among them included the first year-over-year increase in median home sales prices since Scott Walker was elected governor in November 2010, and a 25.6% increase in new sales compared to February. And March certainly showed good numbers, especially when it completed the highest number of sales for the Jan-March quarter since 2007.

The Realtors are a pro-sprawl group that has given heavily to Walker, and Walker personally thanked the Realtors last month at a signing for wetlands de-regulation. The Realtors continue this trend of backing the Governor by trying to give Walker some kind of credit for the better home numbers in March, claming "an improving state jobs market is helping home sales," and using Walker's talking points about job growth in January and February. (I notice they ignored mentioning the 4,500 job losses in March) March's increase isn't part of a long-term trend, unfortunately, as median home sales prices are still down 2.0% for the year compared to 2011, and down 11.1% from this time 2 years ago (as home buying credits ran out). In fact, Wisconsin home prices have been declining for the better part of the last 5 years, and they've steadily dropped since Walker took office in 2011.
Wisconsin median home sales price, 2007-2012

The price increase in March isn't even that impressive compared to other parts of the nation, as the national figures show that Midwest median home sales prices went up 5.2% vs. 2011 compared to Wisconsin's 0.4%, and the U.S. as a whole had prices up 2.5% compared to last March. And when you look at the chart in Wisconsin, you can see a reason why. Prices traditionally rise throughout the Spring and peak in Summer, as families and others are more likely to look for homes in those years, as the weather is better and school gets out of session in the Summer. Well given that Wisconsin was among numerous states with a record-warm March. With that in mind, it wouldn't be surprising that March home values would go up accordingly, as that March weather felt a lot more like May.

By the same note, the sales numbers for March are nice, but those also rise with the temperature, and the 4,816 sales are still below what Wisconsin gets for a typical May. And they're still nowhere near where we were before the Great Recession started to sink in around the start of 2008. (the chart may be a bit messy, and it's skewed by the tax credits from mid-2009 to early 2010, but I think you can get the idea)
Wisconsin # of home sales by month, 2007-2012

Wisconsin's sales are up an impressive 25.0% year-over-year, but the rest of the Midwest has also benefitted from the strong weather, with total sales up 13.9% year-over-year. And given that this April has seen temperatures fall back toward normal (tell me about it, it's cutting into my Terrace Time), let's see if the improved March numbers are merely sales from later in Spring that got pulled forward due to the historic heat. Let's check back to see if April's sales numbers stay at the level that we saw in March, or even fall to the 4,300+ from April 2011. If it stays above that, and if home prices rebound toward 2010 levels, then we might be able to say Wisconsin housing is on the rebound. But it's ridiculous to say so based on this one month. So if I was the Realtors, I wouldn't exactly break out the party hats quite yet, and I wouldn't take the March sales report as any kind of major positive for their boy Scotty.

And when the typical Wisconsinite trying to sell a house has seen that home lose between $12,000 to $15,000 in value over the last 2 years, I'm thinking that Walker's bragging about saving people a handful of dollars in property taxes falls a little flat, don't you? In fact, given the drop in home values, most Wisconsinites are paying a higher tax rate (which is a tax increase in everywhere but property taxes, apparently), and they're seeing their wealth go down. That's not exactly the combination you want if you're trying to claim that cutting worker salaries and aid to schools and communities is "working."

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