Record home sales in 2020? In the middle of a pandemic? When part of the first half of the year was shut down for only essential business? Yes, yes and yes. The Wisconsin REALTORS Association (WRA) released December 2020 housing statistics and for all of 2020, “…existing home sales rose 7.3% to 88,685 total homes sold, which is the highest annual sales amount recorded in the state since the WRA revised its data collection methodology in 2005.” Median prices also were up 11.4% year-over-year to $220,000; the first time that the median price has been above $200,000, per the WRA.
What has fueled these numbers? Even though real estate was deemed an essential business activity in Wisconsin, easing restrictions in the second quarter certainly helped in sales picking up. In addition, historically low interest rates were a huge reason for these statistics to reach all-time highs.
With historically low interest rates comes more purchasing power, which is leading to less homes on the market with all of the demand of purchasing. As an example, if you were purchasing a $250,000 home, 20% down ($50,000), 3.75% interest rate for 30 years, your principal and interest payment would be $927/mo. A 3.75% interest rate may have been in later 2019 or early 2020. Fast forward to the end of 2020, where the rate (all things equal for your lender, including credit score) may have fallen to 2.75% – your payment would be $817/month. If you wanted to still spend around $927/month for principal and interest with a 20% down payment, you could actually buy a home around $285,000 with a 2.75% interest rate. Consumers are able to spend more on homes and less homes have become available, sparking bidding wars and inventory to be about 2.2 months in December of 2020 in Wisconsin, according to the WRA. Less than six months of inventory is considered a seller’s market and around six months is a balanced market.
Knowing all of this, what about 2021? Well, so far I have seen the bidding wars, the homes that have 50+ showings in a weekend and multiple offers. I have also seen homes that are having price reductions and listings that are expiring. If a home is priced properly, the market is responding. It also shows truly how many people are looking for a home. If you are looking to purchase, do not get discouraged! We are inching closer to the spring market and I anticipate more listings when the weather gets a little better. Until then, if you are willing to see homes in the middle of the winter, please do so.
And, if you are in the market to sell, this is a great time to be preparing for the sale of your home. As I have mentioned, there really are a lot of people looking for homes. I can work with you to determine the right time to sell and for the most competitive listing price! For selling or buying, I would enjoy the opportunity to discuss your local market even further! Please message or call me to discuss!
Brookfield, WI Real Estate – Kelly Ebbole, PSA, MRP, REALTOR, focusing in Brookfield, WI which is located in Waukesha County. I specialize in real estate in Brookfield, Sussex, Pewaukee, Waukesha and the surrounding communities. To discuss your real estate needs, feel free to call or text me at 262-725-5222.