Wisconsin Mortgage Applicants: Now is the Time to Buy
Until recently, Robert Pennewell was a hot commodity.
Looking to buy a house the past couple of years, the 36-year-old resident of Neenah, Wis., was one of a shrinking number of buyers in a housing market that is cooling significantly after record-high activity.
Some 910,000 fewer home sales were recorded throughout the U.S. during the third quarter of this year compared with the same time last year. That’s a drop of about 13 percent. The 29,425 homes sold in Wisconsin represent a 7.5 percent decline.
With fewer buyers, sellers as a whole are dipping prices — 3.6 percent in the median price, from $138,300 to $133,300, for the quarter in the northeastern part of the state, according to the Appleton Post-Crescent.
Home buyers like Pennewell, willing to hunt and wait, have taken an advantage they likely would not have found just a few years ago. He paid $133,500 recently for a duplex appraised by his mortgage lender at $144,000.
“I finally found what I wanted. I watched and watched the property, and finally decided to make my move,” said Pennewell, who plans to live in the lower level of the duplex and enjoy the extra income from the other unit.
Chuck Peeters, general sales manager for Coldwell Banker The Real Estate Group in Appleton, is not discouraged by the slowdown.
“Last year was a record year for us and this year we’re 9 percent below that, so by all means, we’re not in a poor housing market. We are down a little, maybe a couple of hundred units off of last year’s pace.”
Though he did not have data, Peeters said homes are staying on the market longer as Wisconsin mortgage demand wanes. Still, he said buyers expecting to sniff out bargains like Pennewell’s are more likely to find sellers who also are willing to wait for the price they want.
“Right now, there are some pent-up buyers out there and they are taking their time looking around,” Peeters said. “But come the spring, when more buyers are back in the market, prices will start to rise again. So if you are looking, now is the time to buy.”
Peeters said properties listed by his firm around the Fox Valley ranging between $80,000-120,000 are selling best. Coldwell Banker operates 16 offices in the region.
“We have about 120 homes in that range available now,” he said. Many feature either two or three bedrooms, and at least one bathroom.
Homes ranging between $200,000-300,000 are not selling as well.
“There’s quite a bit of inventory in that range,” he said.
David Clark, a Marquette University professor who compiles data for the Wisconsin Realtors Association, said that while sales are down, Wisconsin’s overall real estate market is more stable than other regions of the country.
The Southwest, South and West in recent years saw a boom in investment real estate, that contributed to an artificial inflation of housing prices. As California mortgage costs have risen by hundreds of thousands, buyers have become priced out of the market en masse, and Golden State sales are down 28 percent so far this year.
The advice for Wisconsin buyers is not to wait. While mortgage rates still are historically low, they have been rising, and are expected to creep up steadily throughout the remainder of 2006 and into 2007.
The Federal Open Market Committee’s raising of short-term interest rates has affected rates on various consumer lending products, from home equity loans to credit cards. Though mortgage rates don’t feel immediate effects from recent Fed action, there have been long-term implications.
Mortgage rates are trending upward, experts say. While they have been fluctuating up and down of late, they are moving up. On-the-fence buyers should make up their minds now and capitalize on the best first and second mortgages they can lock in on.