Learn About the Coronavirus’s Impact on Wisconsin’s School Seasonality and Housing Industry
Every seasoned real estate agent knows the ebb and flow of the seasonality of real estate and its effects on the industry’s home inventory and activity. What’s important about this change in seasonal activity is how it affects your market. Having a firm understanding of your community and your clientele that inhabit it will determine your success throughout the year.
We can all look at this upcoming school year and know there will be differences from years prior due to the coronavirus and its halt on our daily lives and economy. What we need to focus on now is how to move forward and recover. Some members of the state’s real estate industry are skeptical of what we should do during such a black swan event.
“We don’t have any good precedent for this at all. This isn’t an economic problem, it’s a public health problem, an area we don’t often think about in real estate. We call it a ‘black swan event’ because it’s something you see as infrequently as you see a black swan—an event that occurs outside of your normal 95% distribution or two standard deviations,” said Mark Eppli, Director of the James A. Graaskamp Center for Real Estate and a faculty associate in real estate and urban land economics at the Wisconsin School of Business.
Typically, coming out of the high activity of the summer season, Wisconsin’s real estate market is strong heading into the fall. Wisconsin’s summer season is still moving today, with changes put in place for safety, and some are optimistic for a slight comeback in home sales toward the tail end of the summer season.
It’s not crazy to be optimistic in these challenging times. Recently REALTOR.com released their June 2020 report that paints a picture of a fast recovery in the midst of this pandemic and a return to January 2020 growth.
Wisconsin’s School Year Seasonal Effect
Pre-coronavirus, the U.S. residential housing market was strong, particularly in Wisconsin. The state’s year-over-year home price appreciation for March 2020 was 12.2%, with the median price hitting a record high of $207,500. Amazingly, Wisconsin’s real estate market during this pandemic hasn’t seen a drastic decrease or hit.
“It’s just remarkable that real estate has suffered less than an 8% decrease in sales year-to-date during a pandemic. Fueled by low inventories and historically low mortgage rates, demand is wildly outstripping supply,” said Mark Bourque, broker-owner of Berkshire Hathaway Epic Real Estate.
For example, last month in Kenosha County, real estate professionals sold 227 houses, or four fewer than the same month last year. In Racine County, they sold 273 houses, seven fewer than were sold in June 2019, according to statistics released by the Wisconsin Real Estate Association.
Also notable in the WRA report is that statewide, June sales were 8,401, just 400 fewer than the same month a year ago. Sales were 35,180 for the first six months of the year, 1,805 fewer than for the same period a year ago.
What Does This Mean For Wisconsin’s Real Estate Market?
Right now, Wisconsin’s real estate market is poised to make a comeback after a few uncertain months while adapting to new safety regulations post-COVID-19. Overall, the state is ready to get back to some sense of normalcy as we head into the school year and buckle down for the fall and winter.
Outside of just the state, the REALTOR.com Housing Market Recovery Index reached 101.0 nationwide for the week ending July 18, posting a 2.5 point increase over last week and bringing the index above the pre-COVID-19 recovery benchmark for the first time since March.
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