Looking to buy a home in the Ripon area?
Your options may be limited.
That’s because 2020 was a record year for home sales across Wisconsin and the state’s real estate market has remained strong to start 2021 even as inventories continued to tighten, according to a recent report from the Wisconsin Realtors Association.
The report found that January home sales increased 9.8% compared to January 2020, and the median price rose 10.5% to $210,000 over that same period.
“Very low mortgage rates are fueling demand, and with such limited supply, it’s really driving up home prices,” Wisconsin Realtors Association President and CEO Michael Theo said in a press release.
The release noted the 30-year fixed-rate mortgage was 2.74% in January, roughly 1% less than January 2020’s rate of 3.62%.
“As a result, homes are moving quickly, often with multiple offers, which can push prices above the asking price,” Theo said.
Ripon and Green Lake, too, have experienced increased demand for homes and a tightening of inventory.
Homes have sold at a pace many area realtors have never seen before as families leave the big cities for more rural areas with renewed freedom of working from home, according to four area realtors.
URBAN FAMILIES COME TO RIPON AREA
Century 21 realtor Joan Karsten said Ripon has seen record home sales in 2020 as many of Century 21’s realtors enjoyed “their best years ever” to the point where “there’s no inventory.”
“We’ve got buyers sitting waiting for houses to come on the market, and there just isn’t any movement,” Karsten said. “What hurts the market a little bit is if someone is thinking of selling their house, they have nowhere to go because they can’t find a house.”
She attributed the uptick in home sales to the COVID-19 pandemic, which caused some people living in bigger cities to re-evaluate their living situation and move to the smaller cities because they were less impacted by the pandemic.
One major factor for home buyers, Karsten says, is the ability to work from home, which enables them to avoid living near the office because they no longer have to physically go to work everyday.
“I had people move from New York City to Markesan, Wis. because they simply wanted to get out of the big city,” Karsten said. “They had family in the area, but COVID scared them enough that they made their decision a lot faster.”
Beyond the pandemic, she added that record-low interest rates also fed the home buying frenzy.
“The interest rates certainly sparked everything,” Karsten said. “It was a kind of a perfect storm between COVID and interest rates.”
Likewise, Yellow House Realty broker and owner Lyn Herriot said her firm also experienced record home sales in 2020 and the early part of 2021.
“I’ve never seen anything like this,” Herriot said.
In 2019, she noted the market was fairly strong, but realtors didn’t see the “snatching of homes so quick” with multiple competing offers until 2020.
She echoed Karsten’s sentiments that the home buying has been fueled by low interest rates, and the coronavirus pandemic causing people to leave the big city with the newfound ability to work from home.
In fact, Herriot had one family move to Ripon from Colorado because someone recently gained the ability to work from home and they had previously left Ripon for the individual’s job.
“We’ve never had enough listings for the amount of buyer activity, even right now,” she said, noting homes will typically sell for “well over asking price” because of the limited supply. “There’s never enough rural properties; the thing could be falling down and people would buy it somehow.”
A ‘FEEDING FRENZY’ IN GREEN LAKE
In neighboring Green Lake, Emmer Real Estate Group Founder Jim Emmer has seen similar trends, which he attributed to “favorable interest rates” that he expects to hold for the next year or so.
Emmer noted this time of year, there’s typically less inventory than in the spring and summer months.
“A lot of the inventory got absorbed into the market here in the third and fourth quarter of last year, and there haven’t been as many new homes coming on the market,” he said. “So, right now, there’s a shortage or a tightness of available homes.”
Emmer echoed the other realtors’ sentiments on witnessing people leaving the big cities for rural and suburban areas, noting he’s sold homes in Green Lake to people from Chicago and Milwaukee, who now can work from home.
Another factor contributing to the low inventory of homes, Emmer says, is the 2008 recession. Prior to that recession, he noted there were a lot of homes being built.
But when the market crashed, he said many of those builders “got out of the business.”
With the real estate market coming back, he’s hoping more people seek work in the trades, which could help build homes. Emmer added that construction costs also have increased more than 35% since the last recession.
“It’s more expensive to build a home today than it was just two years ago,” he said. “There’s a lot of factors that are weighing into” the low housing inventory.
Special Properties broker and owner Jeff Shadick has seen an increased demand for homes from young families from Chicago, Madison and Milwaukee, who view Green Lake as a “safe haven.”
“People realized they could work from home in beautiful, rural Green Lake with a better view than from their high rise in the city,” he said. “Interest rates are also a factor right now [for] people who still have their jobs. It’s the lowest interest rates we’ve seen in modern times.”
Specifically, Shadick saw an increased demand for lakefront property and properties with access to Big Green Lake. He described the phenomenon as a “feeding frenzy.”
“It was unlike anything I’ve ever seen; we doubled our best year last year,” he said. “It was just a wave of new, young families looking for primary homes. It hasn’t let up, it’s still happening right now.”
Shadick described the current real estate market as “a sellers market” because there’s so much demand for homes.
“If you want to sell your house and you list it within the proper price range, you should sell fairly quickly,” he said. “Once you sell, if you get back in the market, that’s a problem because now you have to buy in at a higher, escalated price.”
HOW LONG WILL IT LAST?
Area realtors remain unsure as to when the market could swing in the opposite direction and home sales could slow.
“I’m just uncertain about what’s going to happen,” Herriot said.
Karsten described real estate as cyclical, swinging from a buyer’s market to a seller’s market and vice versa. Right now, she says it’s very much a seller’s market.
“How long will it last? Nobody knows,” she said. “As long as the interest rates stay close to where they are at, I think the trend should continue.”
Likewise, Shadick expects interest rates to remain low for the rest of this year, but he doesn’t know when “the shoe will drop.”
“What goes up must come down,” he said.
The end of the pandemic and a rise in interest rates, Emmer said, could cause the market to slow down.
“If there’s some kind of big disruption in the economy, that could cause a reset,” Emmer said. “Because it can’t keep going the way it is.”
In the meantime, area realtors plan to take things in stride and continue working to help families find homes as the demand continues to remain high.
“We’ll keep taking it,” Shadick said. “I’m an optimist; I hope it goes for several more years.”