Houses are Selling Slower, but for More

Nationally, sales of new and existing houses will drop 9.4% for this year compared with 2005
Nationally, sales of new and existing houses will drop 9.4% for this year compared with 2005

RISMEDIA, October 12, 2006?(MCT)?Milwaukee [Wisconsin] metro home sellers are finding that waiting is worth it.

Fewer houses sold in the third quarter, but for higher average prices than a year ago.

For the third month in a row, the volume of house sales slowed in September, by 16.6%, reported Metro MLS. In Milwaukee County, it’s taking an average of 86 days to sell a house, 43% longer than a year ago.

Nationally, sales of new and existing houses will drop 9.4% for this year compared with 2005, secondary mortgage lender Freddie Mac predicted. That’s worse than the 7.9% drop that Freddie Mac forecast in September.

But when houses in the four-county metro area finally sell, it’s for a higher price than last year.

The brightest spot was Ozaukee County [Wisconsin], where the third-quarter average house price was $315,352, up 9.4% from the third quarter of 2005. Waukesha County [Wisconsin] saw the slimmest increase ? 3.3%, for a current average sale price of $308,354.

Elsewhere in southeastern Wisconsin, Sheboygan and Racine counties saw slight drops in house sale prices, by 2.4%, to $152,810, and 2.6%, to $180,199, respectively.

The Milwaukee metro market seems to be holding up better than the national housing market.

On Tuesday, former Federal Reserve chairman Alan Greenspan said the U.S. housing market’s falloff will “dramatically slow.”

Milwaukee has already been there.

July was the low point for the quarter, says Dick Kollmansberger, president of First Realty GMAC, based in Waukesha. Momentum started picking up in August, so much so that he believes that the market will rebound in the fourth quarter.

“Every office I went to today people were out showing, people are writing offers,” Kollmansberger says. “Lenders are getting calls for pre-qualifications again.”

Less competition is easing the way for houses lingering on the market, Kollmansberger says.

September saw 5.2% fewer new resale listings in the metro area than there were a year ago, and some developers have delayed new projects. In September, MTD Marketing Services LLC reported that new housing construction permits dropped by more than 20% in southeastern Wisconsin. Fewer houses coming onto the market makes it easier for those already for sale to sell.

Bruce Shabahang thinks it all adds up to a sweet spot for the east side condo he put on the market a week ago.

Now’s the time to grab a house in the suburbs, he says, and that means he has to sell his two-bedroom condo overlooking Lake Michigan.

The 26-year-old rug dealer has it on the market for $257,900. That’s a bit lower than what units in neighboring buildings have sold for, according to the market comparison he conducted.

“It’s a very, very decent price,” Shabahang says. “I know that the market for homes is slow, but condos on the east side, especially on Prospect, there’s a big demand for them.”

Levelheaded analysis like that is what’s selling houses, says Kollmansberger. Sellers who scope out the competition and price their houses according to what else is on the market now are the ones whose houses are selling.

Across all price ranges, those who cling to a price based on sales made in the long-dissipated market of 2005 are the same ones who end up overpricing, and then reducing, their asking price, he says.

Greenspan reiterated that the worst of the housing drop may be over. His successor, Ben S. Bernanke, said last week that the market is in a “substantial correction” that will lop about a percentage point off economic growth in the second half and restrain the expansion next year.

Bloomberg News contributed to this report.

Distributed by McClatchy-Tribune Business News.