Housing market

Armando Lopez, a drywall finisher, works inside a home under construction on Tillberry Street in Baraboo. Housing industry insiders share a guarded optimism about this year's real estate market.

Ed Zagorski / News Republic

Housing industry insiders share a guarded optimism about this year's real estate market.

Ray Zimmerman, a sales agent with Stark Company Realtors in Baraboo, said he believes the market will turn around, but it will be a gradual process.

"This is something that won't happen overnight, but there are some good buys out there right now for those looking for a new home," Zimmerman said. "It's the low prices of homes that is attracting buyers."

Jamie Phephles of Century 21 Affiliated in Baraboo said this year looks promising.

"Our office has been busy," he said. "People are calling and inquiring about showings. So far, so good."

The Wisconsin Realtors Association released a recent report showing a slight increase in homes sold statewide last year. The report also showed that prices of homes sold were down.

About 51,512 homes were sold statewide last year, less than a 1 percent increase from the 51,392 homes sold in Wisconsin in 2010. The median price of homes statewide dropped to $132,000 in 2011 compared to $141,000 a year before, according to the report.

In Sauk County, last year's median price for homes was $129,000 as compared to $144,500 in 2010, a 10.7 percent decrease.

Buyers in the county have sought to take advantage of the lower prices, driving up home sales in the county 7.8 percent over last year, from 580 in 2010 to 625 in 2011. The affordability of financing also has helped spur new purchases.

"Interest rates are also at historic lows right now," Zimmerman said.

Marquette University economics professor David Clark, who works as a consultant with the Wisconsin Realtors Association, said there is a "pent-up demand" of people wanting to buy homes. He said the economy has led some people who were looking to purchase homes to rent longer than usual.

"I do believe with the extreme affordability of homes, those people who are renting may decide to purchase a home," Clark said.

He said the edge of buying a new home may go to the first-time buyer who has good credit rather than the person who has a home to sell.

"In terms of sales it will be a better year this year than last but not a big upward movement," Clark said. "I believe the economy will continue to improve but we need sustained growth in the job market."

Clark said the national unemployment rate was at 8.5 percent in December 2011, which was down from 9.4 percent in December 2010. Wisconsin's unemployment numbers were even lower, at 7.1 percent in December 2011 and 7.5 percent in December 2010.

"The housing and labor markets are intertwined," Clark said. "The more confidence you have in knowing you will keep your job may persuade you to purchase a home because you have money coming in."

Wisconsin Realtors Association President Michael Theo said a strong job market will be necessary to drive homes sales this year.

"We are actually seeing private sector job growth in excess of the lost local government employment for 2011, and with net job growth outpacing the growth of the labor force for the year, the rate of unemployment has been falling," Theo said.

That is good news for local construction firms that have been buoyed by the improved housing market.

"We're having one of our better winters right now," said Dan Beal, owner of Craftsman Construction in Baraboo. "Things are really starting to move for us and sales are on the rise, too."

Beal said his business is constructing everything from homes for first-time buyers to high-end ones.

"Right now, the costs of the homes we are building go between $230,000 to $1.8 million," he said. "We're booking spring jobs already. People are just anxious to build."

Lannie Pyfferoen, co-owner of Brute Construction in Baraboo, said he expects business to pick up.

"We do construct agricultural buildings and residential homes and also do some remodels," Pyfferoen said. "I think the market will pick up. It all takes time."