Monthly Market Update: Housing Statistics for Dane County for July 2018
Once again, Dane County sales of houses and condominiums was strong in July, and only slightly behind July sales for 2017 still ahead of 2016 sales, the two best years for annual homes sales on record. August saw another small dip in sales but nothing remarkable, as sales were barely behind the same month for 2017 and 2016. The continued strong sales come despite historically low inventory and rising prices. A balanced market is 6 months of inventory, and we were still below 2 months of inventory in July (1.9) and marginally above 2 months in August (2.1). It is important to put this in perspective by considering that since the end of July in 2007 when the number of available homes was 5409, the inventory has dropped year over year to 1314 at the end of July in 2018 and it has only ticked up to 1395 by the end of August.
To understand the continued rise in sales price, we look at the most recent 12 months of sales. As of the end of August the 12-month average median sales price for all of south central Wisconsin is up 5.8% to $274,980, not a surprising result considering the high demand and low supply.
Summary of the data for the month of July 2018:
- Number of sales of single family homes: 900 (913 in 2017)
- Number of new listings: 863 (944 in 2017)
- Total listings available end of July: 1314 (1364 in 2017)
- Number of months inventory available: 99 mos. (2.04 in 2017)
- Interest rates up to approximately 4.59% (up from 4.54% in June and 3.9% in 2017)
- Median price of single family homes and condos: $289,000 ($270,000 in July 2017)
Summary of the data for the month of August 2018:
- Number of sales of single family homes: 864 (894 in 2017)
- Number of new listings: 859 (907 in 2017)
- Total listings available end of August: 1395 (1434 in 2017)
- Number of months inventory available: 11 mos. (2.15 in 2017)
- Interest rates up to approximately 4.6% (up from 4.59% in July and 3.75% in 2017)
- Median price of single family homes and condos: $279,950 ($271,250 in August 2017)
Water, Water Everywhere…
With all the recent flooding in the Madison area and in the State of Wisconsin generally it seemed like a good time to take a look into the issue of extreme rain events and to examine how the potential for flooding might affect the average homeowner and not just those of us in a floodplain.
This is not a One-Time Thing
By now it is very well-established science that climate change is affecting our weather patterns across the globe in a variety of ways. For this blog I want to focus specifically on the most immediate impact we are currently seeing in the Midwest. The National Climate Assessment is a report on the science and effects of climate change with a focus on the United States as mandated by the Global Change Research Act of 1990. In the most recent report it reveals that precipitation in the Plains, Midwest and Northeast is increasing, and that the heaviest rains are increasing in intensity and frequency (https://science2017.globalchange.gov/). In other words, we might well expect to see more extreme rain events in our area for the foreseeable future. (see also https://www.epa.gov/climate-indicators/weather-climate)
Floodplain or No Floodplain, It is Time to Reassess
Most of us assume that only people in floodplains need to worry about flooding and flood insurance. However, during the most recent dramatic downpour, with some local areas receiving as much as 13 inches of rain in a 24 hour period, some areas that never had water problems before suddenly found themselves inundated by water that simply couldn’t drain away fast enough.
Lenders who are federally regulated or insured are mandated to require flood insurance for properties that are in certain flood zones as determined by the National Flood Insurance Program. But that isn’t the end of the story as we are seeing more clearly that flooding isn’t just occurring in the typical areas near bodies of water. In addition, consider the fact that homeowners insurance will not normally cover flood damage, including any water that comes into the house sideways through a wall or window or up through the floor. This is true even if the flooding is caused by a misplaced downspout or a backup of the floor drain or sump. And according to FEMA, more than 20% of flood damage claims come from properties outside the high risk flood zones. (https://www.fema.gov/national-flood-insurance-program)
Evaluate Your Property for Water Handling
There are several things you should consider when choosing a house to buy or if you are already in a home of your own, when maintaining it. Here are just a few:
- Is it a low-lying area? Pay attention to the overall slope of the neighborhood and consider whether it is likely that water may potentially begin to pool near your home if an extremely heavy rainstorm hits.
- Are neighboring properties sending their water onto your property near the foundation? Where do your neighbors’ downspouts point and where do they discharge water from a sump pump?
- Is the grading around your home proper? The pitch needs to be away from the foundation to allow water to run off and around rather than collecting along your basement walls.
- Are the gutters protected from leaf litter? Are there trees overhanging the roof? Are there signs that the gutters are getting clogged and overflowing regularly?
- Are there signs in the basement that it has been a moist or damp environment? This extends beyond obvious water damage to more subtle signs of mildew, warping, staining, rusty nail heads in trim, paint on cement or block walls bubbling up and mustiness to name a few.
Drain Tile May be In Order
It is not always possible to keep water away from the foundation. So especially when you intend to have finished space in a basement, it is a good precaution to have drain tile installed by a professional. This may be a bit pricey, at around $1000 to $1500 per wall. But there are a few advantages. When the water finds its way to your foundation, it is given a way to run into the sump crock where it would be pumped out and thus save your carpets, drywall and furniture. Most installers will offer a warranty against having water in the basement if the system is properly maintained. You also would qualify for special coverage under your homeowners insurance in the event the system ever fails.
Consider Flood Insurance
Even if you aren’t in a floodplain where flood insurance is required, if you have reason to believe your property is at risk of flooding with the increasing extreme rains, you would be wise to consider obtaining flood insurance. It is normally less expensive outside the high risk flood zones, averaging around $700 to $1000 per year. It would also be worth considering the special coverage for back-up of sewer or sump (which would cover the sump pump failing or not being able to keep up with the water.) So in essence the basement waterproofing system in combination with the special coverage can be a sort of alternate flood insurance. Please consult with your insurance agent about what coverage is best for you.
Don’t Throw Up Your Hands
We all wish that climate change was not happening, but there is no point in simply wringing our hands and complaining about what befalls us. There are things we can do to start to cope with what seems to be the new normal and to help ourselves weather the storms to come.