ABODE: HOUSING

ABODE: HOUSING HOUSING EXPLOSION

The housing market has been on a tear for years; now it’s just out of control

Roughly a month into the pandemic, things were looking rough for the economy, for local businesses, for people hoping they would still have a job at the end of it.

So it might have come as a surprise that not only did the housing market not seem to be suffering at that point — it was going along as crazy as ever. That never stopped last year, the data shows. In fact, it set records for both the number of homes sold, and for the median home prices.

That doesn’t mean selling houses looked the same — real estate professionals took measures to keep safe, such as sanitization, using video to show houses to buyers, insisting on mask wearing, limiting open houses.

All of that was going on while the market continued to skyrocket. Prices continue to rise, inventory remains low, demand high, and if you’re in the market for a house… well, be prepared to think a lot differently than people did in the past.

An example? Someone recently posted an anecdote on social media in which they had an appointment scheduled to look at a house. The realtor called back and had to cancel because someone out of state just put down an offer on the house and it was accepted. The buyer hadn’t even seen it in person.

That didn’t come as a surprise to realtor Nichole Guenthner. “I’m on some Facebook groups where they’re telling stories of houses going for $50,000 over listing,” Guenthner says. Buyers are waiving contingencies and inspections. And appraisers are becoming taxed with the high level of sales.

How crazy has the housing market become? A look at the stats is revealing. A record number of homes — 88,912 — were sold in 2020, during the COVID-19 pandemic, according to data from the Wisconsin Realtors Association. That’s about 4,000 more than the previous high in 2017.

And median home prices in Wisconsin also hit a record — the median crossed the $200,000 number for the first time ever, and by quite a bit. The median sale price was $220,000 in 2020. For perspective, that’s about twice as much in 2011, the worst year on record for some time (after the housing bubble burst).

Although Marathon County didn’t quite hit those numbers, home prices are rising here too. The median home price in Marathon County hit $182,500 in 2020, a record for the county. That’s a huge leap from 2019 when the median price had hit $165,950. Compare that to the record low median price of $114,000 in 2011.

A total of 1,894 homes were sold in 2020 in Marathon County, but the last three years have all seen more than 1,800 homes sold.

All that means buyers need to be ready to act fast. The days of looking at a house, thinking it over, coming back with a more experienced relative, are long gone. “I have asked buyers in the driveway after seeing the house for 30 minutes, do you want to write them an offer?” Guenthner says. “That’s how fast the market moves.”

As of Thursday morning, for example, there were 247 homes on the market in the greater Wausau area (including Merrill and Mosinee). Of those listings, only 48 were actually still available for sale.

Realtor Lora Bladow is seeing the same thing, though she says larger-scale homes might sit a little longer on the market. But not by much.

And the Wausau market isn’t even the most prolific right now, according to Bladow. “The Madison market is even crazier,” Bladow says.

So why is the market in such a feeding frenzy right now? There are a couple of reasons. One, rents in Wausau and other places have been on the rise. New apartments have been popping up, including at the old Mountain Lanes site and at Riverlife.

As new apartments are built, rising building costs will raise the price of construction, and thus the price of rents to compensate those funding the projects. An example: The price of lumber has risen 174% since this past April, data Bladow shared with City Pages shows. How’s that for inflation?

But why 2020? Guenthner says there are more millennials with disposable income, who have either been living at home or in an apartment, who have decided to take the leap. Especially during the pandemic with less discretionary spending going on, they’ve had money built up to buy housing.

And Bladow says she’s been seeing more out of state buyers than usual — not just from typical states such as Minnesota or Illinois, but from Nevada and Tennessee.

“I think the resurgence of the small town is really proving itself this year,” Bladow says.

It’s possible new rentals planned for Wausau, particularly its downtown — developers say 1,000 units could be added in the downtown area as a result of projects that include Riverlife and the Wausau Center mall — could temper the market a bit. So-called empty nesters could start selling their homes more as they seek smaller abodes after their children leave. That could open up more inventory, increasing the supply side.

But in the meantime, if you’re hunting for a house, some tips: Know exactly what you’re looking for, be ready to put in an offer, and don’t even think about getting a deal — more likely, you’re going to be spending more than the asking price. Getting pre-approved by a bank is an absolute must. If you’re not knowledgeable about houses and what to look for, make sure to have someone knowledgeable with you because that one showing might be the only one you get.

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