Are you sick and tired of all the media coverage focusing only on the negative aspects of today’s real estate markets? Yeah, me too. Wish there was some good news that we could all focus on so potential buyers and sellers aren’t scared away? Yeah, me too.

Well there is good news: Housing in Wisconsin is extraordinarily affordable! Today’s market is characterized by low prices, high inventory and historically low interest rates. This combination has made housing in Wisconsin an incredible buy, and we should be singing the praises of this market loud and far.

So how do we get the word out? Perhaps the best way is by using our own Housing Affordability Index (HAI). This index shows how much of a median-priced home a median-income buyer can afford. More precisely, the HAI shows the fraction of the median-priced home that the family with median income can afford to purchase, given a 20 percent down payment and current interest rates.

The HAI index in Wisconsin for October was 245, which was up from 226 just one year earlier. This means a buyer with the median income in Wisconsin, approximately $62,800, could qualify for a house that is 245 percent of the October median-priced home of $129,000. Overall, the higher the affordability index, the larger the share of homes in the state that can be purchased by the typical median-income family, so it’s clear that many homes in the state are within reach for those with even more modest means. 

But homes in Wisconsin are not just affordable compared to last year, they are more affordable than just about anywhere else in the country. Using the National Association of REALTORS^®’ October HAI figures from across the nation as a benchmark, Wisconsin affordability was higher. This makes our housing more affordable than the nation as a whole with an HAI of 198, as well as our neighbors in the Midwest with a regional score of 242, and much better than all the other regions in the nation: the Northeast at 163, the South at 202 and the West at 165. Tell that to those out-of-state buyers looking to move here as well as those who aren’t sure if now is the time to buy that first home. And tell that to anyone else, for that matter!

The WRA HAI has remained above the 200 mark, with the exception of only one month, since September 2009. While income growth has been weak since the median family income hit bottom in June 2010, the combination of favorable interest rates, currently at 4 percent, and moderating housing prices, a median price of $134,000 in November of this year is down 2.2 percent from $137,000 last November, makes housing in Wisconsin a tremendous value for buyers.

One housing cost that is not included in the HAI index is taxes. While Wisconsin remains far too over-reliant on real estate taxes to fund our local governments and schools, the new state budget passed last summer capped property tax levies, allowing only for increases based on net new construction or passage of a local referendum. For 2011 school property tax bills, which are the biggest part of most property tax bills, this means a drop of 1 percent from a total of $4.69 billion last year to $4.65 billion in 2011, the first decline since 2005-06, according to the respected Wisconsin Taxpayers Alliance. While individual tax bills will vary widely, the caps on property taxes can only further help housing affordability in Wisconsin.

Our experts predict housing affordability will remain very high for the foreseeable future as state inventories for homes remain above 14 months. This means that given the average monthly pace of sales over the last year, selling the existing homes on the market will take 14.4 months. A balanced inventory is considered to be six months of supply. Interest rates are also expected to remain affordable, albeit likely to increase slowly in the next couple of years. 

So it’s time for us to tell the media, and anyone else who will listen, that Wisconsin homes are as affordable now as they’ve been in many, many years. It’s time for some good news for a change!