I have not taken a look for a while at home prices here in the Northwoods. There are some surprises! We closely monitor volume and it is up roughly 9% over 2015 year-to-date. The question is “have these gains come at the cost of home sellers”? The answer is a definitive inconclusive.
The big news is Vilas On Water is up and it is up big. Last year, the average lake home sold for $288,746. This year it is $318,855, an increase of $30,109 or up 10.4%. Volume is healthy as last year we sold 198 lake homes and we have sold 160 thus far in 2016. Oneida off water homes are up slightly too moving from $127,733 to $130,155 (up 1.8%). The not so great news is that Oneida on-water homes fell slightly from $275,878 to $273,124 (down 0.9%). Vilas off-water is also down from $139,594 to $129,137 (down 7.4%).
Conclusions? It is tough to conclude much because of the inconsistency. We are beginning to run short of inventory on the lakes and that may be the reason why we are finally seeing some increases.
We are past peak but with the phenomenal summer, the colors are running late. We still have tons of leaves on the trees and the colors are still terrific. Please come up and enjoy!
Some mixed results in the April end of month report. 80 homes were sold in April. This exactly the same number as were sold in March. It is also precisely the same number that was sold in April of 2015. So, we are flat with last month and flat with last year. I have never seen that and I find it odd.
The one number that is significant here is the number of homes listed. We normally are laser focused on the red line. This month the blue line offers some interesting news. The blue line is much lower than it has been. Last year, April saw 430 listings come on the market. April of 2016 saw only 347 listings taken, a drop of 83 units or 19.3%. We will see what happens in May but the shortage of inventory that we have heard of elsewhere in the country may be coming to the Northwoods. This shortage may result in higher home values. We are already seeing spot shortages of higher end off-water homes and lake homes in the $300K to $450K price range.
The weather is now warming up. The buds on the trees are coming out and the Northwoods’ is in full spring mode. The fishing opener may be one of the more productive as the surface lake temperatures are hovering in the mid 50’s. Please come up and enjoy!
Like the swallows coming back to Capistrano, listing and buying activity is increasing in the Northwoods. Warmer temperatures seem to spur activity. 80 units were sold in March and that compares with 61 in March of 2015 (up 31.1%) and 54 units in February of 2016 (up 48.1%). I can say that showing activity has been good for this time of year.
The number that I am following closely right now is the number of listings coming to the market. It seems to me that we are low on listing inventory. It may be that I am so used to a slow market that ANY shortage of inventory shocks me. 245 units were listed in March and this compares with 211 in March of 2015 (up 16.1%) and 110 units in February of 2016 (up 122%). Year-to-date there have been 485 new listings vs 462 in 2015 (up 5.1%).
Why the increases? I will attribute most of it to the mild weather. We have had a pretty wimpy winter here. There is not much snow on the ground. Some of the smaller lakes have opened up already. We have had a nasty week of weather this past week and I heard the lake groaning this morning. No I am not the Lake Whisperer. Lakes do talk. That is a sign of ice expanding. Not what I want to hear in April! My prediction will be that most lakes here will be open before April 20 with some of the biggies opening after that.
I am late with my mid-month newsletter. Since the snow is now gone, I went to Arizona to watch some baseball. I am sorry to say that it appears to be a dismal season for the Brewers. That is another subject.
This time it is Oneida County’s turn to look at the sales price and compare that to the Fair Market Value. What exactly is the FMV and why should I care? Good question. Wisconsin property tax law works like this. Each property owner is supposed to pay their fair share of property taxes based on the estimated value of the property. Each township in the Northwoods has their own assessor; usually someone they hire out. This assessor looks at the property and decides what the value is. This value is the Fair Market Value. Sometimes it is accurate. Sometimes, not so much. I find the local assessors do a great job with land values. They are not as accurate with improvement (home, garage, etc) values.
The chart looks at the FMV vs. the sales price. The closer to 1.0 the closer the sales price is to the FMV. Some people are shocked to learn that their FMV is close to the market value. The truth is that sometimes the FMV is an accurate estimate of a property’s value.
The snow is largely gone. We still have ice but spring begins this week. It looks like spring will come early!
We are looking at Vilas County and the Sales Price/Fair Market Value (FMV) ratio. This is interesting as the FMV is supposed to be near the value. Each town has their own assessor so it has a tendency to vary.
The most accurate assessor appears to be in the Town of St. Germain. The average values fell within 3% of FMV. Interesting point here in that off water homes sold for .7% over FMV. Conover was quite close as well with values within 4%. The assessor that may need a bit of help is in the Town of Boulder Junction where the off-water values are almost 27% low and the on-water values are almost 12% low. In fairness, there were very few sales in the town and a few short sales or foreclosures can really skew the data.
Overall, the Fair Market Values turned out to be reasonably accurate. Several segments actually sold for over FMV including Eagle River City On-Water (+8.5%), Manitowish Waters Off-Water (+4.6%) and St. Germain (+0.7%).
Why is this important? Many people ask what is the value of their home and often the Fair Market Value is a rough estimate.
We have had up and down weather. The trails were terrific and then we shot up to 50 degrees on Saturday. On Sunday, it is cold and snowy. More cold is in the forecast so winter is far from over.
January 2016 is in the books and it is not unlike other Januarys. 69 homes were sold in the month (red line). This compares with 76 in December 0f 2015 (down 9.2%) and 49 in January of 2015 (up 40.8%). January is not a hot month for temperatures or home sales. In 2012 only 42 homes sold. In 2013, only 56 homes sold. In 2014 only 50 homes sold. So in retrospect, January 2016 looks rosy!
We here in the Northwoods are a bit concerned about the rise in short term interest rates. Thus far, they have not much of an effect on 30-year mortgage rates which are still hovering around 3.75%. A bigger issue may be the rise in the capital gain rate. The highest rate rose from 15% to 28%. We will monitor how this effects the Northwoods real estate market.
We have lots of snow and ice. The trails are in great condition and we are at the best time of year for winter activities. The LaBatt’s Blue Pond Hockey Championships are in Eagle River and it is always a great time. Please come up and visit us!
2 weeks ago, we looked at the year-end numbers and we had good news to report. We were up 18.3% in volume in Oneida and Vilas Counties in 2015. So that is great news! It is the first year we sold more than 1200 units since 2005.
Above is our first look at the average sales numbers. The chart above shows the average price for Oneida and Vilas Counties and by on and off water for the last 12 years. There is some mixed news on the price as off-water increased and on-water decreased. The average price for off-water rose from $132,614 to $139,594 (+5.2%)in Vilas County and $112,809 to $127,733 (13.2%) in Oneida County. The average price for on-water fell from $309,822 to $288,746 (-6.8%) and from $293,036 to $275,878 (-5.8%).
How do we interpret the numbers? I am not convinced that lake home prices fell. It is my belief that we simply sold a greater number of lower priced lake homes (and fewer high end homes). Likewise, I believe we sold more higher end off-water homes. When you look at the curves above, off-water homes have remained relatively stable. If we take out the peak years of 06, 07 and 08, even lake homes do not look so bad.
We have lots of ice and snow. Please come up and enjoy!