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Early COVID-19 effects show in home sales - As seen in the Leader-Telegram

Posted: 05.18.20

As seen in the Leader-Telegram:

Wisconsin home sale figures have begun to reflect the early effects of the coronavirus pandemic, however some Chippewa Valley counties still reported increased activity.

The Wisconsin Realtors Association released its April home sales report on Monday, showing a 6.9% decline in sales for the month compared to the same time last year.

“Since the time from an accepted contract to a closing can be four to eight weeks, it’s only now that we’re seeing the effect of the coronavirus on monthly sales,” WRA Chairman Steve Beers said in a news release.

April’s report includes closings that could have been under contract in mid-March when a national emergency was declared, followed by the state’s safer-at-home order.

There were 5,900 home sales closed last month in Wisconsin compared to 6,337 a year before.

The decline wasn’t uniform across the state though. More than half of the reduction came from southeastern Wisconsin, including a 13% drop in Milwaukee County home sales.

Some counties in the Chippewa Valley saw sales increase in April.

In Dunn County, there were 57 homes sold last month — 15 more than in April 2019. Chippewa County’s home sales went from 53 in April 2019 to 60 last month. But in Eau Claire County, last month’s 96 home sales was a dozen fewer than a year before.

In their year-to-date sales, Chippewa and Dunn counties are up about 27% and 21%, respectively. Eau Claire County has fallen 9% behind the pace set last year.

While low inventory of homes on the market has been a persistent concern in recent years, it became notably worse last month as far fewer people listed their homes for sale.

Compared to last April, there were 38% fewer new listings on the market last month. Combined with homes that continued to be for sale, statewide inventory was down by 20.5%.

“Our inventory problems got much worse over the last month, and that is continuing to drive home prices up,” WRA President & CEO Michael Theo stated.

However, higher unemployment levels due to businesses closed for about two months in accordance with safer-at-home orders is another factor the association is watching.

Last month’s unemployment rate is not yet available from the state, but is expected to be much higher than March’s 3.4% based on the amount of displaced workers filing claims. Though businesses are reopening, the economic recovery is expected to take some time.

“Even as much of the state economy begins to open up now that the stay-at-home order has been struck down by the Wisconsin Supreme Court, it will be a gradual process,” said David Clark, Marquette University economist and consultant to the WRA.

Upcoming monthly home sale reports will be expected to show larger declines as they will be for contracts signed in the midst of the state’s safer-at-home order.

“It’s going to get a lot worse over the next few months, which unfortunately is our peak sales period,” Beers said.

Gary Brenizer, an Eau Claire real estate agent and president of the Realtors Association of Northwestern Wisconsin, said the full effect of the coronavirus pandemic on the busy homebuying season won’t be apparent until the May and June reports.

His hope is that concerns over COVID-19 and orders that urged residents to stay home will result in the spring and summer’s usual sales activity merely being postponed, not curtailed entirely.

In a typical year, about 43% of home sales happen between May through August, according to the WRA.

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