Home sales sag in city
Podcast Episode
Southern Wisconsin home buyers are changing their behavior in reaction to a soft market. Kyle Geissler reports.
Photo
Joe Saladino, a realtor with Coldwell Banker, waits for people to take a look at an open house on Beacon Hill Dr. in Janesville.
Photo
JANESVILLE — Joe Saladino waited in a quiet house on a quiet street on the east side Sunday afternoon. He was waiting for customers.
Three couples showed up during the hour-long open house at 3850 Beacon Hill Drive.
The asking price was $169,900 for the three-bedroom ranch with fireplace and a double-sized lot that ends at a greenbelt.
None of the couples seemed terribly interested, but you never know, said Saladino, who has been in real estate for nine years.
These days, houses are moving more slowly than they were just a couple years ago. More than 1,900 houses sold in Rock County in the first three quarters of 2006. Only 1,303 were sold through September this year.
Walworth County has seen a similar trend, with nearly 1,500 sales in the first three quarters of 2005 but only 769 this year.
Statewide, sales and average sale prices also are on the decline.
It doesn't seem to matter what kind of houses they are. They aren't moving like they once did, said Joe's wife, Verna Saladino, who is president of the Rock Green Realtors Association.
Potential buyers are cautious, Joe said. One couple told him they are waiting until spring to decide.
That echoes the forecast from the National Realtors Association, which is predicting a springtime sales rebound, Verna said.
And there's hope in some Western states, where the housing slump began but a comeback has begun, Verna said.
While local sales are down, things might not be as bad as they seem.
The average price of a home sold in the third quarter dropped to $123,100 in Rock County and $176,900 in Walworth County. Those prices are still higher than they were five years ago.
Joe thinks the local market was in a boom, "and now the market's kind of going back to normal."
But buyers seem to be waiting, perhaps to see if prices will go even lower.
"I hope they are not going to go much lower, but you don't know. You just don't know," Verna said.
One thing is certain: Sellers are motivated and willing to deal, the Saladinos said.
"There are some awesome deals. I can't even believe some of the properties," Verna said. "Unfortunately, there are sellers out there who have bought in the last few years and have to transfer or whatever, and they're selling for less than what they bought it for."
Joe said buyers have become more savvy. In the past, they've asked him who built the house. Now, they already know the answer when they come for a tour.
Buyers also are looking for permanence.
"Rather than saying, 'In four years, I can sell the house,' they're looking long term," Joe said. "And people are even down-sizing a bit."
Realtors also are seeing more people looking to commute to places such as Madison, Joe said.
"Who I really feel sorry for are the higher-end properties right now because they certainly are not moving," Verna said.
Verna has heard of doctors moving here but renting instead of buying right away.
For the first time in her 13 years in the business, Verna said, she's seeing homeowners put their houses up for rent because they owe more than can sell them for.
The news of mass layoffs and the planned end of production at the General Motors plant has hurt home sales, Verna believes.
"I think it just scares everyone," she said.
Verna and Joe say positive economic news would help.
"Really, now it's time for our city leaders to really work on getting Janesville as diversified as possible and get us some industry with some good-paying jobs," Verna said.
With sales down, realtors are feeling the pinch.
"The agents really need to watch their spending," Verna said. "Some have picked up part-time jobs to supplement their income."
Strangely, the dip in home sales comes at a time when interest rates are down and there's a new tax credit for first-time homebuyers, Verna said.
"Truly, I think it really is the best time for someone, if they're thinking of investing in real estate, to buy a home," she said.
Verna said she still believes that real estate is the best investment around, but even she is uncertain about the future.
"We're in a different market than any or most of us Realtors in the business have ever seen before right now," she said.
Nov 25, 2008 at 6:13 p.m.
Suggest removal
I agree with those who say it's NOT a buyers market. If you look at real estate historically, the prices became so over inflated, that the correction in the massive bubble that was created is FAR from bottoming.
.
Market conditions are so unstable right now. More unstable then we have seen in decades, or perhaps history. If this deflationary spiral continues, prices in just about everything will keep coming down. Which is NOT a good thing, as the economy will be in horrible shape, with mass unemployment (the great depression was a classic deflationary spiral). On the other hand with all the $$$ that is going to be pumped into the system with bailouts, stimulus packages, ext; you have the very real possibility of the dollar crashing, and bringing on hyper inflation, in which the prices of everything would explode.
Nov 25, 2008 at 2:59 p.m.
Suggest removal
"If you think you will be losing your job or any other source of income, do not go buy a house, don't go buy a brand new car."
Do you think people really know if they are going to lose their jobs? In reality, we are all replaceable at work. Your logic says that if you think you might get sick, don't breathe the air...
Nov 25, 2008 at 11:38 a.m.
Suggest removal
"There's a lot of hype on both sides, but this is just supply and demand is all it is and right now there is a big supply and a tiny demand - prices mucs go down or the market won't clear and, yes, it really IS that simple." Um, what?
Nov 25, 2008 at 3:51 a.m.
Suggest removal
janesvillecomments, see the September article on the ongoing transportation options study.
http://gazettextra.com/news/2008/sep/17/...
.
At best, this is still at the exploration stage. Startup of a commuter rail operation involves regulatory agreements, environmental and economic impact studies, traffic and need studies, securing of capital and subsidies, procurement of rolling stock, construction of stations, and much more. Ten years, minimum. I guarantee it will take much longer than the current recession will last. Long-term thinking is being done about this, because it probably is critical to the long-term economic success of the area, and in the end such an investment may well make sense -- but a response to a temporary (even multi-year) slump in the housing market it is not. They're just on vastly different time scales.
Nov 24, 2008 at 8:38 p.m.
Suggest removal
I've been in real estate for 16 years and this is not "going back to normal."
What's going on is that in the future if a person doesn't have a job and a down payment they won't be getting a mortgage.
This depresses demand.
Here's the dirty little secret: if I were a Buyer there's no way in hell I'd buy now - prices are only going to keep going down for the next year, or so, and I'd predict by about 15%.
If I were going to sell and buy at the same time, fine, because it's a wash.
Sellers, if you have your house on the market now you have ZERO power to even THINK you can get a certain price - you cannot. There is too much on the market, and Buyers can't get mortgages - your house is pretty much worth what a qualified Buyer offers, and if you don't like it, then take your house off the market.
Buyers - go ahead and make an offer - if the Seller turns you down, then put the same offer back in and make it good for a month - you have nothing to lose and you can withdraw it at any time before the Seller signs it if you find a better deal.
There's a lot of hype on both sides, but this is just supply and demand is all it is and right now there is a big supply and a tiny demand - prices mucs go down or the market won't clear and, yes, it really IS that simple.
Nov 24, 2008 at 8:37 p.m.
Suggest removal
thekid: is it a buyer's market for the wacky tabacky too or is that a seller's market these days? Sorry couldn't resist :) But, I agree, it's a buyer's market right now in almost any market.
Nov 24, 2008 at 8:30 p.m.
Suggest removal
Perhaps the Gazette could look into the future of commuter rail in Janesville. I wonder if Wisconsin & Southern Railroad could run a commuter train between Janesville and Madison and how long it would take to make a daily run on the existing track?
Nov 24, 2008 at 7:44 p.m.
Suggest removal
autos, homes whatever...it is a buyers market right now...
Nov 24, 2008 at 7:44 p.m.
Nov 24, 2008 at 5:53 p.m.
Suggest removal
Making "J-Town" a bedroom community for Madison is not a long-term strategy, and certainly commuter rail is ten years away at best. Tax credits are determined at the state and federal level. The council doesn't control these things.
Nov 24, 2008 at 4:58 p.m.
Suggest removal
Are they seriously confused why housing sales are down?
Nov 24, 2008 at 4:52 p.m.
Suggest removal
BTW, there is a $7,500 tax credit (really a 15 year, interest free loan) for first time home buyers, retroactive from 4/9/2008, to 7/1/2009.
"The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer."
http://www.federalhousingtaxcredit.com/
Nov 24, 2008 at 3:37 p.m.
Suggest removal
I know that the current drop in gas prices is only temporary. That is why I am saying that the city, the county, the state should do more to promote/enhance mass transit--for commuters. (Gosh, a big infrastructure project right now by the government might even help the economy...)
The other option, regardless of gas prices, is to encourage investment in the existing housing stock we already have here in J-town. So many homes that are much more affordable than most of what you can find in Madison--that could be the draw that brings people here and makes them think that commuting between here and Madison is not so bad...THINK BIG people...Janesville was a thriving community for a long time before GM arrived, and it can be a thriving community after GM turns off their lights next month...lets get the ideas out there instead of the usual litany of complaints...
Nov 24, 2008 at 2:04 p.m.
Suggest removal
So saying "why on earth would anyone buy a house right now" was a bit of a over reaction? I can't imagine you over reacting and putting your foot in your mouth lulu......
Nov 24, 2008 at 1:57 p.m.
Suggest removal
I think people just need to live within their means. If you think you will be losing your job or any other source of income, do not go buy a house, don't go buy a brand new car.
Nov 24, 2008 at 1:48 p.m.
Suggest removal
If people quit building houses, buying cars, shopping, going out to eat etc. the economy will go into a death spiral. We can't save our way out of a recession. It took WW II to pull us out of the Great Depression.
Nov 24, 2008 at 1:46 p.m.
Suggest removal
Moving to the Janesville area in the beginning of a major regional recession would be really dumb. Unemployment in the region keeps climbing higher and higher past the national average. Yes the whole nation is experiencing a huge economic slowdown, but places like Janesville with the closing of the plant and other businesses are going to be hit harder. Commuters are not a good target either. As Zoom stated, these low gas prices are only temporary.
Nov 24, 2008 at 1:27 p.m.
Suggest removal
I don't beleive that people from Madison are seriously looking to commute. Most people know that the current low fuel prices are temporary.
Nov 24, 2008 at 1:25 p.m.
Suggest removal
Why on earth would anyone buy a house right now with things so up in the air? There is a reason why people are selling and renting!
Nov 24, 2008 at 1:13 p.m.
Suggest removal
beeferer. I agree with that statement too.
Nov 24, 2008 at 12:40 p.m.
Suggest removal
dongo- spoken like a true realitor...
Nov 24, 2008 at 11:17 a.m.
Suggest removal
It IS a great time to buy in Rock County right now. The interest rates are low. Our property taxes are much lower than surrounding areas and gas prices have dipped to make commuting more attractive. Additionally, the realtors in this community have actually protected our area so to speak. They did not let housing prices go drastically high like the rest of the nation. You didn't see a $200,000 house go for $475,000 3 years later. Think how bad things in this area would be had they not done that.....
Bottom line is, it is a great time to buy a house in Rock County right now, and to think anything otherwise would be silly.
Nov 24, 2008 at 10:40 a.m.
Suggest removal
PJGnyc i agree with you too. 100% but the CC knows whats best for us common folk.
Nov 24, 2008 at 10:30 a.m.
Nov 24, 2008 at 10:08 a.m.
Suggest removal
"Realtors also are seeing more people looking to commute to places such as Madison, Joe said."
Yes. That is something the city council should be pursuing--how to make J-town more attractive to those that would like to commute to Madison, like supporting commuter rail, or tax credits for first time buyers to revitalize some of the great old homes we have here...that would help this city a heck of a lot more than investing in a children's musuem...
Nov 24, 2008 at 9:53 a.m.
Suggest removal
Just wait three years when dispensation checks run out...you will be able to snap up some real bargains...
Nov 24, 2008 at 9:28 a.m.
Suggest removal
Is it just me or do realtors ALWAYS say "Now is the best time to buy" -- no matter what the economic conditions.
Nov 24, 2008 at 9:24 a.m.
Suggest removal
geezz I wonder why
Before you post a comment, consider this:
Note: GazetteXtra.com does not condone or review every comment. Read more in our User Policy AgreementPost Comment
Commenting requires registration.