Local unemployment rates versus the state and the nation - January 2009

Each month the Wisconsin Department of Workforce Development reports on local, state and national unemployment rates. The latest report for the month of January shows unemployment has been rising throughout the country, but Madison and Dane County continue to experience much lower rates of unemployment than the state and the nation as a whole.

The global and national economic trends are having a big impact on our local economy, but we're fortunate to live where we do. Our relatively low levels of unemployment should lend some stabilization to our local housing market while many other parts of the country undergo more drastic changes to their local economies.

You'll find our full unemployment report on the economic trends page at DaneCountyMarket.com.

Have a good day,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Obama's new housing plan

There's been a lot of confusion and a lot of debate over President Obama's mortgage relief plan. The plan aims to benefit two homeowner categories:

1) Homeowners who have been making their monthly mortgage payments, but due to the current real estate climate are unable to refinance their loans down to more attractive rates.

2) Homeowners who are at risk of foreclosure.

This graphic from the New York Times does a nice job of outlining the bill and provides some examples of qualified and non-qualified homeowners.

Have a good Friday,

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Wisconsin Realtors Association releases third quarter data

The Wisconsin Realtors Association has released its price and sales data for the third quarter of 2008. You'll find more information in this article from Marv Balousek of the Wisconsin State Journal.

Subprime loans still a factor in Wisconsin

Here's an interesting article from Paul Gores of the Milwaukee Journal Sentinel. From the article:

• Wisconsin subprime lending as a percentage of all mortgage loans exceeded the national average in 2006 and 2007.
• In 2007, subprime loans made up 17% of all Wisconsin loans, compared to 14.9% for the nation as a whole.
• In 2006, subprime loans made of 39.3% of all Wisconsin loans, compared to 37% nationally.
• Adjustable interest rates are scheduled to reset on 30.2% of Wisconsin's subprime loans over the next 12 months, compared to 27.8% nationally.
• Research suggests that a 1% increase in unemployment rates raises home foreclosures in a county by 3% to 9%.

The numbers, from Russ Kashian of the University of Wisconsin - Whitewater, suggest that Wisconsin foreclosures will continue to exist at high levels over the next year or two. Our preliminary review of October data shows that Dane County foreclosures reached a new high last month. We'll be publishing the October data soon.

Associated Banc-Corp may sell stock to US Treasury

According to the Associated Press, Associated Banc-Corp has received approval to sell $530 million in stock to the US Treasury as part of the Troubled Asset Relief Program (TARP). You can read the details here.

US Bancorp to sell $6.6 million in stock to US Treasury

Local lender US Bancorp will be participating in the Troubled Asset Relief Program (TARP). You can find the details here.

Local bank to participate in TARP program?

According to this article by Marv Balousek of the Wisconsin State Journal, Marshall & Illsey Corp. has received preliminary approval to participate in the new Troubled Asset Relief Program (TARP).

On a related note, our preliminary review of the latest foreclosure numbers indicates that Dane County foreclosures will reach a new high during the month of October. We'll have the final numbers in a couple of weeks.

WHEDA temporarily suspends new rate locks

This comes from local mortgage broker, Jeff Statz:

Effective immediately, WHEDA will not accept new rate locks. WHEDA will continue to accept preapproval requests and underwrite. Current volatility in the capital markets is impacting WHEDA's costs and access to capital. Once the capital markets stabilize and WHEDA's access to low-cost capital resume, rate locks will resume.

WHEDA executive director Antonio Riley does a nice job of explaining this decision in a short video that is available from the WHEDA home page.

Mortgage rates fall upon announcement of Fannie Mae and Freddie Mac rescue plan

The federal government has taken over Fannie Mae and Freddie Mac. Why is this important? Fannie Mae and Freddie Mac currently finance over two-thirds of all loans originated in the U.S. Capital reserves had become dangerously low at both companies, endangering Fannie's and Freddie's ability to buy loans on the secondary mortgage market - and ensure the availability of loans. For those who want to learn more, NPR does a good job of explaining the Fannie and Freddie rescue program here.

The mortgage market has responded favorably to the rescue plan with lower rates. If you're thinking of buying your first home, you now have another good reason to start your home-buying plan right now. We recently covered the basics of the $7,500 first-time homebuyer tax credit. We also covered how sellers are more flexible this time of year when supply is high and demand is low.

You can start your home-buying plan by consulting with your lender. Take some time to learn about the financial implications of owning a home, how much home you can comfortably afford, and the mortgage application process. Once you and your lender have established a sound financing plan, then you'll have the foundation you need to begin the process of finding the right home for you.

For more information on the home-buying process, visit the Buying Real Estate page at DaneCountyMarket.com.

Dane County prices were higher in Q2 2008, Wisconsin and National prices were lower

More evidence that the Dane County real estate market is faring well compared to most other markets around the country. Yesterday the National Association of Realtors and Wisconsin Realtors Association released their median price and sales volume statistics for the second quarter of 2008 (April through June).

Median Price

• The Q2 2008 median price for Dane County homes and condos increased by 1.1% from Q2 of 2007
• The Wisconsin median price decreased by 3%
• The National median price decreased by 7.6%

Sales Volume

• Dane County Q2 2008 home and condo sales decreased by 23% from Q2 2007
• Wisconsin home and condo sales decreased by 21%
• National home and condo sales decreased by 16%

Dane County sales continue at a sluggish pace, but prices are holding up very well compared to other markets around the state and country. Two big reasons for this are Dane County's stable economy and low unemployment rate.

For more information on the Dane County single family home and condo market segments, visit the real estate trends page at DaneCountyMarket.com.

WSJ article about gas prices and Dane County real estate

This article comes from Marv Balousek of the Wisconsin State Journal and includes interviews of area homeowners and real estate agents.

Gas prices have certainly become an important factor for some, but the data for 28 area communities does not yet suggest a clear pattern where buyers are choosing Madison and other more central locations over Dane County ring communities. We'll revisit this topic later this year after we've accumulated additional sales data.

Pending home sales are down, prime mortgage delinquencies are up

The June 2008 national pending home sales index released yesterday by the National Association of Realtors dropped by 12.3% from last year's value. The index is intended to be a leading indicator of future closings. According to the NAR:

"A sale is listed as pending when the contract has been signed but the transaction has not been closed."

Based on the latest pending home sales figure, expect Dane County sales volume to remain lower over the next several months.

The Wall Street Journal also published an article yesterday on the delinquency rate for mortgages originated in 2007. According to a study conducted by the FDIC, .91% of "prime" mortgages originated in 2007 were seriously delinquent after 12 months. The equivalent number for mortgages originated in 2006 was .33%.

Stay tuned as we continue to track foreclosures at DaneCountyMarket.com and in the foreclosure topic of our blog.

Gas Prices and Dane County Real Estate

Mike Ivey from the Cap Times provides an interesting view of gas prices and Dane County real estate in today's paper.

City of Madison seeking to increase the use of solar, wind power

An interesting article about one alderman's proposal for increasing the use of solar and wind power in Madison...On a related note, Off the Grid, a store which sells solar power energy systems for businesses and homeowners, has opened in Madison. You can read more about Off the Grid in this recent article from the Wisconsin State Journal.