Over the past several weeks, I’ve been asked by journalists, policymakers and members about Wisconsin’s real estate market. They want to know how we’re doing. They expect me to talk about the economy, consumers and public policies, but they probably don’t expect me to talk about you. But I do.
From an economic perspective, Wisconsin’s economy has fared slightly better than that of the nation. Our unemployment rate, for example, is a full percentage point better than the national average over the first nine months of the year. But our overall job growth remains flat, with slight improvements in the private sector offset by reductions in public sector jobs. Until the job market improves, the housing market will remain soft.
But there is hope. Wisconsin has recovered from long stretches of high unemployment in the past to see our economy grow again. In the double-dip recession of 1980-82, Wisconsin’s unemployment rate topped off at 11.5 percent and it remained in double digits for over a year. It didn’t go back down below 5 percent until 1987. By contrast in this recession, our unemployment rate peaked at 9.2 percent, having hovered in the 7.3 percent to 7.9 percent range since September 2010.
While housing prices in Wisconsin have declined, they have fallen at an annualized pace of less than 5 percent in the second quarter of this year - that’s much better than many other states. And while the drop has not helped current homeowners, it has improved the affordability of homes for those looking to buy. However with more than 15 months of inventory as of October, we can expect the buyer’s market to continue throughout 2012.
From a consumer perspective, these unemployment numbers are a major contributor to a lack of confidence. Their confidence is further weakened by confusing new ground rules for obtaining financing as even creditworthy buyers are hesitant to enter the market, despite historically low interest rates and affordable prices.
From a public policy perspective, we’re in an equally tough market. Our lawmakers must make hard decisions to address chronic budget deficits, but they are doing so at a time when demand for basic social services is increasing and the need for investment in infrastructure and education systems is also rising. Whether you support budget actions by the legislature this year or you support alternative solutions, these tough decisions were made without increasing property taxes which could have further weakened an already-fragile housing market.
After reviewing these and other facts about the economy, consumers, and public policies, I then tell those posing the question about you, the REALTOR®, and your role in this market. While it’s true that our membership has fallen from about 19,000 at the height of the housing bubble to a more historically normal 13,000 today, the REALTORS® of today are the survivors – the best of the best. You are the experts in each and every local market; the experts on how to navigate new banking rules and practices to secure financing; the experts on pricing, marketing and bringing the right buyers and sellers together. Now more than ever before, consumers need the expertise of a Wisconsin REALTOR®. And those consumers who engage a REALTOR® today will find how to take advantage of today’s market despite all the challenges.
In the print pages of this magazine or the screen pages of our website and e-mails, you’ll see the WRA talk a lot about the economy, consumers, and public policies that impact our market. But what’s equally important is the expertise that you bring to that market. It’s a good time to invest in that expertise. Take advantage of the educational opportunities to improve your skills, whether through quality continuing education or by seeking professional designations. This market, as well as all future markets, will depend on the expertise of Wisconsin REALTORS®. Make sure you’re ready by investing in you.
Happy Holidays,
Mike Theo