Home prices are one of the most popular barometers of market vitality, yet they only tell part of the story. Soft prices may accompany improvements in other indicators such as purchase demand, absorption rates, seller concessions or market times. Regional, market-wide prices fall short by not recognizing the mix of homes that close each month, be it weighted toward single-family, lender-mediated or new construction. In addition, price movements often lag changes elsewhere in the marketplace. Let's see what the preferred market yardstick has measured for November 2011.
New Listings in the Milwaukee region decreased 9.4 percent to 1,340. Pending Sales were down 0.9 percent to 694. Inventory levels shrank 10.6 percent to 9,602 units, a common trend across the country.
Prices were a tad soft. The Median Sales Price decreased 4.7 percent to $160,000. Days on Market increased 2.4 percent to 113 days. Absorption rates improved as Months Supply of Inventory was down 10.8 percent to 10.0 months.
Not only do forces beyond supply and demand affect home prices, but other factors outside of housing serve as inputs into the equation. New job growth and consumer confidence drive household formations which in turn fuels purchase demand and pressures prices. Similarly, when real incomes rise, families can afford more house and move-up buyers become increasingly motivated. To that end, the jobless rate fell from 9.0 percent to 8.6 percent in November – the lowest in 2.5 years.
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