As we close out the calendar on 2010, we look back at what appears to be another year of high unemployment and decreased home values. National headlines continue to scare home buyers, sellers, investors, and real estate professionals. Is it possible that smaller market areas are affected more by national statistics than by actual decline in values?

In late 2006 & 2007 the housing market bubble began its decline, crashing in August 2008. The Federal government allocated $900 billion dollars towards special loans and bailouts, with over half going to quasi-government agencies like Fannie Mae, Freddie Mac, and the Federal Housing Administration. Still today we are fighting to move past what has been labeled the worst economic housing decline in history. 

*National Statistics: The national median existing-home price was $170,600 in November 2010, up 0.4 percent from November 2009. However, overall home values are still down over 22 percent since 2007. At that time, the median existing-home price was $218,900. Distressed homes have contributed to a large market share, accounting for 33 percent of sales in October and November 2010, and maintaining that large market share since November 2009. Foreclosures, which accounted for two-thirds of the distressed sales, sold at a median discount of 15 percent in November, while short sales were discounted 10 percent in comparison with traditional home sales.

*Regional Statistics: Existing-home sales in the Midwest increased 6.4 percent in November from a month ago to a level of 1 million. That is still 35 percent below last year sales. The median price in the Midwest was $138,900, down 1.1 percent from November 2009.

*Local Statistics: Locally in Waupun the median existing-home price was $105,500 in November 2010, up just under 10 percent from 2009.  Following the initial decline, Waupun’s median existing-home price fell from $112,000 in 2007 to $105,000 in 2008 a decrease of 6 percent. Since the high in 2007, Waupun has maintained a median existing-home price of $106,750. This is less than 5 percent decrease in home values over the past 3 years.

While the selling price has been nearly steady, there has been a dramatic drop in the number of units sold. In Waupun the number of unit transactions has fallen every year since 2007. 178 units sold in 2007, 127 units in 2008, 111 in 2009, and 102 in 2010. That is almost a 44 percent decrease in the number of homes sold over that period. The question becomes, if the number of buyers is down almost 44 percent over the past 3 years due to market conditions, why have the median values remained steady. National statistics have a tendency to pollute the thinking of a smaller market like Waupun. Sellers are hesitant to sell believing the value is down based on nation statistics. The reality is the Waupun market area has held strong, maintaining nearly steady home values!

Record low interest rates in 2010 were reported at 4 percent for a 30 year fixed and 3.5 percent for a 15 year. In the short term, mortgage interest rates should hover just above recent record lows. Although mortgage interest rates have increased slightly in recent weeks, overall conditions remain extremely favorable for buyers who can obtain credit. Coupled with government tax incentives for home buyers the low interest rates are a once in a lifetime opportunity. 

**The national rise in unemployment rate is not as large of a contributing factor as some would think. The national unemployment rate reached 9.8 percent in November, up from 9.3 percent in 2009 while Wisconsin’s overall unemployment rate in November was down to 7.6 percent from 8.9 percent one year ago. Dodge County reported an unemployment rate of 7.2 percent in November down from 8.7 percent in 2009. Fond du Lac County also reported a decrease in unemployment with 6.7 percent down from 8.0 percent in 2009.

Within the Waupun area, strong manufacturing, and a large State government labor force, helped maintain market stability that is less susceptible to drastic fluctuations of other locations. Typically the Midwest remains less influenced by economic fluctuations than other regions of the country. The decreases in the unemployment rate statewide, as well as within the county, should continue to provide the local market with continued non-volatile values.  

It is important to disregard national statistics in comparison to smaller market areas. They do not reflect the local current growth. Retail store parking lots are full.  Restaurant and supper club dining rooms have a wait and many cars on the road are new! Just as national statistics don't reflect the local retail or job market, they especially don't mirror the local real estate market. The larger declining markets have scared away sellers and buyers in numerous smaller market areas. As demand for homes rise in 2011, an increase in supply will follow, aiding in the growth of an already well-founded and stable community.

2011 will continue to be a strong buyers market.   As 2011 approaches and we make our New Year Resolutions, don’t let “national statistics” keep you from talking to a Real Estate Professional today!

Questions of comments? Contact House to Home Properties at info@housetohomeproperties.com

*Information provided by RANW MLS, National Association of Realtors, Trulia.com

**Information provided by Wisconsin’s Department of Workforce Development, and United States Department of Labor.