2014 April Home Sales Report - Wisconsin REALTORS® Association

2014 April Home Sales Report - Wisconsin REALTORS® Association





Date: May 19, 2014



MADISON –

Wisconsin existing home sales fell in April even as median prices

continued to rise according to the most recent analysis of the state

housing market released by the Wisconsin REALTORS^®

Association (WRA). Home sales declined 11.6 percent in April compared

to the same month last year due to a combination of higher home mortgage

rates, higher prices and harsh winter temperatures. Median prices rose

over that same period, increasing 1.4 percent to $139,900.



“As we enter the second quarter of the year, we have been expecting some

improvement in home sales, but it’s important to remember that April

sales are still impacted by the February weather given the 6 to 8 week

lag between the time an offer is accepted and a closing takes place,”

said Steve Lane, Chairman of the WRA Board of Directors. He also noted

that there were heavy snows in the northern part of the state as late as

mid-April 2014. Every region of the state experienced a decline in

April sales. The Central region fared the best, falling just 3.8

percent over the April 2013 to April 2014 period, followed by the

Northeast region which dropped 8.5 percent over the period. The South

central region fell 9.6 percent and the Southeast region saw a decline

of 10.1 percent. Finally, the North region dropped 17.4 percent and the

West fell 25.5 percent. Interestingly, home sales fell more

substantially in the metropolitan counties which averaged a 13 percent

reduction in sales in April compared to rural counties which declined 7

percent between April 2013 and April 2014. “This may be due in part to

much tighter inventories in the urban counties compared to rural

counties,” said Lane. Rural counties had just over 14 months of

available inventory in April compared to just 6.9 months for

metropolitan counties.



“The
national economy barely grew in thefirst quarter which under normal
circumstances might suggest an economic slowdown, but even that has been
partially blamed on the weather,” said

Michael Theo, WRA President and CEO. The advance estimate of first

quarter real GDP growth revealed that the economy grew at just 0.1

percent, and the combination of a harsh winter, lower trade and lower

inventory replacement kept the economy stagnate in the first quarter.

Countering that was a relatively strong consumption component of real

GDP, and a relatively strong April jobs report. The latter indicated a

stronger than anticipated 288,000 jobs created in the US in April which

is the largest monthly growth in more than 2 years. “The key to

sustained growth in the housing market is a growing economy we hope the

current employment trends continue,” said Theo.



For the second straight month, median home prices grew at a modest pace with April

prices up 1.4 percent over April 2013. “The relatively slower pace of

sales over the last four months has allowed our inventories to increase

this year although we are still below April 2013 levels,” said Mr. Theo.

The inventory of unsold homes stood at 8.9 months in April compared to

9.4 months this time last year. “We always expect our inventories to

expand in the winter since home sales cool off, and our inventories have

increased quite a bit this year, which has helped stabilize our

prices,” he said. Wisconsin median prices increased 7.2 percent in 2013

compared to 2012, and they were up 4.2 percent in the first quarter of

2014 relative to that quarter in 2013. In contrast, the price increases

the last two months have been less than 2 percent on an annual basis

which is more in line with general inflationary trends.



The Wisconsin Housing Affordability Index measures the percent of the median priced

home that the household with median family income can afford to buy at

current mortgage rates, assuming a 20 percent down payment. The index

currently stands at 231 compared to 252 in April last year. “Although

slipping slightly, Wisconsin still has very affordable housing, which is

an asset that continues to be a solid hedge against inflation,” he

added.

Real Estate Advisor: June 2014

The Art of the Approach: Curb Appeal, and More

When considering the mysteries of what attracts the ultimate buyer, few will deny that ?curb-appeal? is a sort of magic bullet. The term is a buzz word for the enticing image of your home as seen from the street, and is similar to the adage of ?judging a book by its cover.? Buyers who rely upon this might overlook a treasure in the rough, but savvy sellers know curb appeal is a key tool to finding a buyer more quickly.

Curb appeal is key when buyers are looking through multiple listings, getting a feel for neighborhoods from the comfort of their cars -- just ?driving by.? Often, buyers will look at advertisements and listings online or in print, and if they are local will take a peek on their way home from work. Because of the power of this ?curb view,? often the primary photographs used in advertisements and listings are from this angle. Money spent in improving this viewing angle is among the smartest investment. Simply put, painting and pruning trees and shrubbery can transform a home, helping to shed light on its features.

Other aspects of the approach to a home can be equally enticing and help to pave the way for a successful interior viewing. After all, when care is taken to the outside of a home, people feel that the interior will also have what they are looking for. Driveways and walkways that are well maintained and artfully presented greet potential buyers as soon as they step out of their vehicles.

Trees and shrubs that lose their leaves can create slick areas on driveways and walkways and be unattractive if allowed to affect landscaping and lawns. Ensure that you consider this when selecting trees to plant near driveways, and keep leaves in check during fall viewings. During the winter, when snow and ice might prove to be a problem, it is essential to maintain driveways and walkways carefully. This is not only for safety, but it illustrates the type of person who has owned and maintained the house itself.

One helpful exercise is to take time to view a home with curb-appeal in mind. At each juncture where a potential buyer might approach and view your home or property, stop and look around. Notice details. Take photographs. Look straight ahead, to the right and left, and even at the ground. If there are appealing features, play those up. If there are issues that block the enjoyment of the home, you can choose to address them. In each instance, seek to frame the view of the home or property in an appealing light, tending to the ground under foot, the areas close to the viewer, and that which they see.

The Results of curb-appeal come when assessing views from inside the home and at various places on the property. All views are important because they are attention-getting elements of the property you are selling. Views are memorable, and a bad one can deter potential buyers.

Whenever possible, seek to create eye-catching points around the home. If certain views are less than desirable, seek to minimize, distract, or even block those views. If you can remove the offensive elements, do so, but whenever possible, contain them, screen them or otherwise affect a change.

Additionally, certain areas in homes have an element of ?approach? to them. You control all the views inside the home, so assess each one carefully. The foyer or entryway has its own view into the home and serves as a curb of its own, or a launching pad, so to speak. As a viewer enters the home, moves to the living room, kitchen, master bedroom, or backyard, each transition creates an impression and should be considered a ?view.? Try walking through the home and noting the approaches so that you can begin to create views within the home that offer the best feelings and highlight the home's strengths. Make sure lighting, furniture, and clutter are all under control so that impressions are good every step of the way.

Follow these tricks for creating the best impression:

• Ensure that the yard and landscaping is neat, tidy, and well-maintained. Seek to flatter the home first, then to show off your gardening skills. Freshly pruned vegetation illustrates careful stewardship.


• If flowering plants are past their prime, trim them back and add in some seasonal plants for color. Re-edge and add mulch to existing beds. Plants in containers may be easily changed out or positioned where they are most needed, and if you invest in nice pots, you can take them with you.


• Control growth of large trees to optimize light and safety of the home and surrounding buildings and property. Remove debris under trees daily, if needed.


• Pay close attention to the front door and garage doors, including paint or stain condition and color, hardware and details ? these doors command a lot of attention. Consider adding seasonal decorations like a wreath or potted plants near the door, but keep these tasteful and few ? don?t distract from the house itself.


• Clean steps, ensuring that they are free of scratches, chips, moss or signs of wear. Repair or upgrade handrails when appropriate.


• A new Welcome Mat at the door will not only make a statement, it is also an invitation for viewers to wipe their feet as they enter the home.


• Investing in new and unique numbers for your home not only makes it easy to identify, but can set it apart with flare.


• Pressure wash the exterior of your home and ensure the gutters and roof are clean.


• Assess and improve the driveway and any walkways to and around the home.


• Upgrade lighting by doors and pathways. Providing safe and stylish lighting will make your home stand out in viewings throughout the day and evening.


• Upgrade your mailbox. Creating a secure and attractive mail receptacle is akin to having a plush welcome mat at the end of your driveway or by your door.


• Ensure that windows and screens are clean and well-maintained. Viewers from both the inside and outside of the home rely on being able to see through them. Shutters and screens should be in top shape. Easy-to-install PVC trim neatens and dresses up older windows and doors. Drapes and shades should be clean and in good working order.


• Familiarize yourself with views from decks and various rooms, and improve those views when possible.


• Decks can be used year-round in many places. Spruce up your deck, porch or patio and show what an inviting space it can be to potential buyers.

First Time Buyer? Be Prepared for Closing Costs

When you are financing a home purchase rather than paying cash, you need to be prepared to pay some initial fees aside from your first monthly mortgage payment.
If you are purchasing a newly built home, sometimes your builder will cover some of these costs as an incentive for buyers to purchase a home, finance it with a preferred lender and go to settlement with a preferred title company. Resale buyers are also sometimes able to negotiate with the sellers to pay some closing costs depending on local market conditions and the individual terms of the sale.
When you arrange your financing with a lender you should receive an explanation of anticipated closing costs and a Good Faith Estimate. You may even see more than one estimate before you go to settlement, where you will see the final version of the HUD-1 Settlement Statement, a federally mandated form for all mortgage borrowers regardless of whether you are refinancing or purchasing a home.
In general, the fees associated with a home purchase include closing costs, loan discount points and prepaid items.

Closing Costs
The amount you will pay in closing costs varies by location and typically costs between 2% and 3% of the loan amount. Closing costs are not calculated on a percentage basis, but instead are based on specific line items related to your loan application and lender fees.
Unless you have negotiated to have someone else pay these costs, they are your responsibility to pay at the settlement.
Some examples of closing costs include:

• Loan origination fee
• Credit report fee
• Loan application fee
• Title services fee and lender’s title insurance premium
• Owner’s title insurance premium
• Survey fee
• Appraisal fee
• Government recordation fees and transfer taxes
• Attorney fees

Loan Discount Points
A discount point is equal to 1% of your loan amount. You may or may not have agreed to pay points for your loan in order to lower the interest rate. If you chose a loan with discount points, then you will pay the point or points at the closing.

Prepaid items
Most lenders require an escrow account to be established with your loan to cover your property taxes and homeowners insurance. Each of those bills will be estimated and then, as part of your monthly mortgage payment, you will pay a portion of those bills to your lender. When the insurance and tax bills come due your lender pays them for you.

Lenders prefer this method of paying those two bills because your home serves as collateral for your mortgage. If you end up with a tax lien for unpaid bills or you lack insurance to make repairs or to replace your home if it’s destroyed, then the lender loses part or all of the collateral.

On settlement day, lenders require you to pay into your escrow account a sum to cover part of your property taxes and homeowners insurance. In addition, you will need to pay for your first year of homeowners insurance in full.

Depending on the day of your closing, you will also need to make a prorated payment for interest on your mortgage from the closing date until the end of the month. You may also be responsible for a prorated condominium fee or homeowners association fee.

The federal government has revised the HUD-1 Settlement Statement multiple times and has made a Good Faith Estimate mandatory. If you have any questions or concerns about any fees you are expected to pay at your closing, you should consult your lender, your title company and your REALTOR® for an explanation.

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We have agents that specialize in Residential, Commercial, Investment, Foreclosures & Short Sales.

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Don't Forget These Costs When Buying a Home

You’ve crunched the mortgage calculators, estimated your tax payments, and taken a realistic look at how much house you can afford. You’ve stuck within your range when scouring the realtor.com® listings, being careful not to bust your budget.
But there are more expenses involved in home buying than just the property costs. And those additional payments, if you don’t factor them in, can be high enough to derail your conscientious planning.
Here’s what to keep in mind:

Buying Costs
You’ve got your mortgage pre-approved, but that’s not all you will need to fork over to get the keys to your new place. Services that need paying:

• Your buyer’s agent fee
• An appraisal to confirm a reasonable market price for the property
• Inspections of structural, mechanical, pest or other potential issues
• A real estate attorney to review all contracts (depending on the state)

Property taxes vary widely, up to 4.2% of a home’s value in some states, according to a CNN map published in 2013. Depending on when you buy, you may owe the previous owners for property taxes they have already paid. You may also need to pay fees to a local association, such as a condo homeowner’s association.

Moving Costs
Moving into a home can involve major expenses for packing, storing and transporting your possessions and yourself. If you are moving across the country, the costs could be significant. Even moving across town can cost more than you planned for truck rental, movers and equipment.

Utilities
Setting up your telephone, electricity, gas and water—did you budget for these expenses? They could cost more at your new place, especially if you’re moving to a larger home or from a rental.

New Stuff
You may need to purchase appliances or furniture for your new home. Some items, like your old particle board bookshelves, may not be worth the cost of moving. Again, if you are sizing up, you face the potentially fun, but possibly financially draining, challenge of filling the new place.

Maintenance and Renovations
Trees fall on roofs. Gutters need cleaning. Driveways need repair…. A standard rule of thumb is to budget at least 1% of your home’s purchase price each year for home maintenance costs.
Maintenance can include things such as painting, replacing roof shingles, fixing or upgrading plumbing and wiring. The amount you will need to pay for maintenance can depend on the age of the home, the previous owners’ upkeep and the climate.

Homeowner’s Insurance
You won’t be able to obtain a mortgage without homeowner’s insurance covering both the property and its contents. However, the standard insurance may not cover natural disasters such as floods, tornadoes and earthquakes. Depending on where you live, you may want to consider taking out additional insurance to cover such risks.

Private Mortgage Insurance and Title Insurance
If the down payment on your home was less than 20% of the purchase price, you will have to pay for Private Mortgage Insurance. PMI protects your lender in case you default. It’s standard, and fees vary. The rules are complicated, but usually once you have paid down the mortgage so you owe less than 78% of the purchase price, you can drop the PMI payments.
Title insurance offers protection for you (and your lender) if you later discover that someone else could lay claim to the title, and therefore ownership, of the house.
Even if you are lucky enough to avoid paying for PMI, you find a low-cost attorney you can trust, and you have a modern, energy-efficient house, these expenses can still add up to thousands of dollars. That prospect should not scare you away from homeownership, but it always helps to be prepared.

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Think you should For Sale By Owner? THINK AGAIN... [INFOGRAPHIC]

Think you should For Sale By Owner? THINK AGAIN... [INFOGRAPHIC]