Walworth County’s home sales have reflected an increase as well. The median price of homes sold in the county grew from $145,900 in January to $170,000 in September, according to WRA data.
And third quarter sales for 2015 were at 509 -- the highest number of homes sold here in a third quarter since 2005, according to WRA data.
The Shorewest Realtors Delavan office broke a sales record in September, selling 52.3 properties during September, more than any other month in the office’s history, according to a Shorewest news release.
John Paul Horning, president of Shorewest Realtors, said all three Shorewest offices that serve Walworth County have set all-time record sales months this year. That includes the Delavan, Lake Geneva and Burlington offices.
“Through the third quarter of 2015, sales in Walworth County are 28 percent ahead of where we were in 2007 at this time,” he said.
Existing home sales typically dip in fall, but this year that could change.
“As we head toward the holidays, buyers are definitely more serious,” Horning said. “Those that are moving because of a job or family reasons need to move now.”
If sales continue at this pace through December, Wisconsin could end the year with around 75,000 homes sold. The last time the state had numbers that good was 2005, when 78,000 homes were sold, according to the WRA.
Marquette University economics professor David Clark, who specializes in regional and local housing markets, and since 2001 has served as a consultant to the WRA, said a few factors are behind the strong homes sales here, including employment and interest rates.
“We have a pretty solid labor market, with unemployment dropping to 4.3 percent in September. At least in counting the number of people who have jobs, we’re getting close to full employment,” Clark said.
“Interest rates bottomed out, if I recall, in November or December of 2012 at about 3.5 percent for a 30-year fixed mortgage, and in September of 2015, they’re not far from that level at about 3.85 percent,” he said. “So we’ve got relatively low mortgage rates, making qualifying for a mortgage easier.”
Many are guessing that the Federal Reserve will increase interest rates soon -- possibly by December.
The National Association of Realtors is forecasting the 30-year fixed rate could surpass 5 percent by 2016.
“I don’t think the potential risk of a rate increase is the primary reason home sales activity has increased recently, but it does hold potential for future sales,” Clark said. “Once the Fed starts raising interest rates, it will likely continue to do so for two to three years. If the Fed starts and sustains this course, it will probably get buyers’ attention and lead to a brief increase in activity.”
Clark said the last recession also played a role in the housing market’s growth by affecting homebuyers, particularly younger ones.
“We’ve been out of the recession technically since 2009, but we’ve had a relatively slow recovery,” he said. “People in their late 20s and 30s who would normally be going into the housing market have stayed out of the market. When the first-time buyers’ normal entry into the housing market was deferred, a lot of economists were wondering if the taste of the millennial group for occupied housing had changed.
“The intention (to buy a home) had not changed, but some of the factors changed. We’ve had a relatively weak recovery, tepid income growth and higher personal debt, such as student loan debt. But I do believe that pent-up demand has started to push the housing market a bit more.
“To be honest, the housing market has been growing for 3 1/2 years in terms of sales volume. Median home prices have been going up for 41 of the last 43 months. Sales volume started growing before that -- in March of 2012.”
Clark said inventories of homes up for sale are generally tighter in cities, with an average available inventory of 11.3 months, versus 13.4 months for rural areas such as Walworth County.
While existing home sales are strong, new construction hasn’t taken off in the state the way it has in other parts of the country.
“The Wisconsin construction market hasn’t seen a significant bounce that we’re seeing at the national level, but we’re quite a bit less volatile here than other parts of the country, so we don’t see the same wide swings,” Clark said.
Still, the growth in existing home sales is good news for buyers looking for homes they can afford.
“The local economy is doing well, consumer confidence is up and the number of new Realtors entering the business is growing,” Horning said.