(First published in the April 12, 2018 issue of City Pages)
Looking to buy or sell? It’s a seller’s market with high demand and rising prices
Last year’s hot housing market in Central Wisconsin—and the entire state—proved that the housing collapse of the Great Recession had decidedly recovered. For eight years previously, houses were hard to unload, and languished on the market. Potential homebuyers were either leery or had difficulty finding credit.
That shifted around the middle of 2016, when houses started flying off the market and some real estate agents reported they had sold most of their inventory.
That trend has only continued. The Wisconsin Realtors Association reports that the three-month period between December 2017 and February 2018 saw the highest winter season in the state since 2005.
And median price of homes are skyrocketing. In the eight counties of the Central Region (which includes Marathon and Portage) the median price of February 2018 sales was nearly 33% higher than February 2017 — $130,000 compared to $98,000.
Meanwhile, the number of homes for sale has plummeted. In Wausau’s southeast side neighborhood, for example, only three houses are for sale in that entire area around Grand Avenue and Memorial Park. Typically, that neighborhood sees 30 homes for sale at any given time.
And it’s not much different in other neighborhoods, says real estate agent Nichole Guenthner, of EXIT Greater Realty.
Perhaps what’s alarming for homebuyers: Bidding wars between multiple buyers that drive up home prices.
What does that mean for a prospective buyer? A number of things, Guenthner says. Buyers pretty much have to show up ready to put in an offer if they see a house they like. Don’t even bother showing up without pre-approval Guenthner says. If a buyer has to choose between offers— which currently happens more often than not—why take a chance with someone whose financing might fall through?
This seller’s market also means there isn’t much room to negotiate. These days buyers are likely to pay more, not less, than the listing price.
Even houses in the $250,000-$400,000 range are selling quickly. Guenther says 46 homes in this price category sold in the first quarter of 2018 in Marathon County. That’s far more than the 30 sold in first quarter 2017 and 18 in 2016.
And all of this means that now is not a great time for house flippers, says Faye Blaubach, who resells homes she and her husband have bought to fix up. She and her husband divide their time between Wausau and winters in Arizona, where she’s a licensed real estate agent. These days the couple find they’re making offers on about 30 houses for every one they pick up. That ratio was more like 10 to one back in 2011. “And we do better than most,” Blaubach says. “People know us here and come to us if they can’t sell.”
The business of flipping houses—buying a house that needs a lot of fixing, doing the repairs, and reselling it at a much higher price—is always tough, but a much bigger challenge in today’s market. Blaubach says most flippers forget to factor in all the costs that go into rehabbing a house, and many call it quits after their first attempt. “It’s not as easy or as profitable as they think,” Blaubach says. “You really have to watch every penny.”
The speed at which houses sell today means buyers need a good idea of what they want and be ready to pull the trigger immediately on a house they like. There isn’t time to wait, Guenthner says, cautioning that most houses you see on real estate sites such as Zillow are probably already sold or have accepted offers.
One local market trend that might free up the home inventory: The scores of condo and apartment units slated to open in Wausau this year and next, many of them targeted to higher-income, empty nester homeowners looking to downsize.
Consider the RiverLife development under construction in Wausau. Senior Property Manager Consultant Corleen O’Malley says six of those apartments already are pre-leased to empty nesters in the Wausau area who are simply waiting to sell their homes until the apartments are ready.
