Local real estate market making slow, steady gains
JANESVILLE — Local real estate agents just closed the book on 2012, a year that included more homes sold at higher prices than the previous year.
That pleases Colleen Nelson, president of the Rock-Green Realtors Association and a real estate agent with FirstWeber Realtors in Janesville.
But what really excites Nelson is the attitude of her fellow agents as they head into 2013.
Each year, the local association loses 15 percent to 20 percent of its members. This year, only about 7 percent did not renew their Rock-Green memberships.
That's an indicator that local real estate agents sense a growing market in 2013, Nelson said, adding that she can't recall membership churn that low in the 25 years she's been in the industry.
"People are really looking forward to this year, and I think it will be a very good year for home sales in Rock County," Nelson said. "Rock County didn't die, and we've always been a survivor.
"There are a lot of good things going on."
According to the South Central Wisconsin Multiple Listing Service, real estate agents sold 1,774 Rock County homes last year. That's a 17 percent increase over 2011, and a 16 percent gain over home sales in 2010.
Although an improvement, the 2012 sales total lagged 31 percent below the pre-recession high of 2,574 homes sold in 2005.
Typically, buyers and sellers care less about the number of homes sold each year and more about the average prices of the homes bought and sold.
Last year, the average price of all homes sold in the county was $110,180, an improvement over 2011 but far less that the average of $138,000 paid for a Rock County home in 2007.
"Our feeling is that we're off the floor, although on the price side we're far away from the $146,000 or $147,000 average we once saw," said Randy Borman, team leader for the Janesville, Milton and Evansville offices of Century 21 Affiliated.
"I think people are more comfortable with this being the new normal. Janesville didn't fall apart, we're moving forward, and things are happening."
With the arrival of the national recession and the closing of the General Motors plant in Janesville, the area's economy suffered a double whammy.
More than many areas, Rock County experienced a high number of distressed properties on the market, Nelson said. Foreclosed homes and bank-owned properties were sold for pennies on the dollar, which had a negative effect on the prices of non-distressed homes.
Local foreclosure filings, however, are decreasing, according to data from the Rock County Clerk of Courts Office.
"I think we're getting some of those properties cleared out, which will help sales prices increase," she said. "People have been standing on the sidelines wondering when the best time to sell is, and I think they are slowly coming back to the market.
"I also think buyers are starting to get nervous that the days of bargains may be ending, so they are starting to become more active."
At several times since the recession started, almost four out of 10 homes listed on the market were distressed properties, Borman said. Recently, the percentage has dropped to about 27 percent.
"For new listings, it's about 22 percent to 25 percent, so it's definitely slowing," he said.
Local real estate agents, however, now are facing a different problem: a lack of inventory.
Nelson noted that new listings dropped off 8 percent in Rock County in 2011. The number of new listings last year was the lowest it's been in the last 10 years, according to Multiple Listing Service data.
"We need more listings," she said, noting that an increase in inventory would more naturally balance the local real estate market.
Nelson and Borman are optimistic this year will be another positive one for the local real estate market.
"People are looking at 2013 as slightly better than 2012," Borman said. "We're not expecting anything gangbuster-like, but we are expecting slow, steady progress, with prices probably advancing 4 percent to 5 percent and the number of sales increasing 5 percent to 10 percent."