GREEN BAY - Green Bay area home buyers face a “disheartening” set of market conditions as the spring homebuying rush begins.

Home sales have declined, rising prices continue to strain affordability, interest rates don’t help and the volume of buyers have drowned out minor increases in inventory found in Wisconsin Realtors Association's February home sales data.

Brown County area Realtors say the conditions have turned what should be an exciting moment for people into a process fraught with risk, rejection and repetition. Joe Moore, a Realtor with Shorewest in Green Bay, said house hunters’ energy and excitement can disappear quickly.

“It’s very disheartening at times,” Moore said. “A lot of buyers will walk away if they see a competitively priced home or a lot of showings scheduled. Families don’t want to get into a bidding war.”

The conditions buyers face — high list prices, a dozen-plus offers above list price, less than a day to decide, whether to waive inspection — still comes as a shock to buyers, and sellers too, said Laura Rabas, a Realtor with Keller Williams-Rabas Real Estate.

“Homebuying should be a really fun, exciting time for anybody. As Realtors, we try to do our best to keep it exciting, to keep that passion alive, but it’s a really cutthroat business,” Rabas said about market conditions. “It’s probably going to be another year of having a little bit more of a difficult time finding a home.”

So let’s unpack Brown County existing home sales in 2023 and provide some details to help buyers and sellers figure out their best path forward.

Related: Home shopping? Here's what to know if you hope to buy a Wisconsin house this year

What’s happening with Green Bay area home sales?

Brown County existing home sales declined to 143, a 10.1% drop compared to February 2022. Year-to-date, the county logged 275 home sales in 2023, a 23.8% drop compared to the beginning of 2022.

The county appears to be doing better than Wisconsin as a whole, though. Existing home sales dropped 28% statewide in February and are down 30.5% year-to-date.

What’s happening with home prices?

They continue to increase both locally and statewide.

The median purchase price in Brown County increased to $269,900 in 2023, a 9.8% increase over the first months of 2022. Statewide, median prices increased 10.1% to $256,500.

WRA noted the 14-county Northeast Region — which includes cities like Green Bay, Appleton, Oshkosh and Manitowoc — led all regions of the state in February with a 20% increase in median prices.

Inventory up, but it’s not enough

Right now, Brown County has an estimated 2.1 months of inventory, an increase over the 1.7 months reported in February 2022.

Inventory is measured by dividing the number of homes for sale in a geographic area and/or price range by the average home sales logged per month. Realtors consider six months of inventory a balanced market; less inventory favors sellers and more inventory favors buyers.

While inventory overall increased, Moore said there is still a very short supply of homes for sale for $100,000-$300,000, a key range affordable to most families and first-time homebuyers. And Rabas added that while inventory is up, it might not feel like it because there are so many buyers in the market.

Buyers, don’t be scared by interest rates

The interest rate in mid-March was 6.6% for a 30-year, fixed-rate mortgage and 5.9% for a 15-year, fixed-rate mortgage.

Interest rates may look terrible compared to the 3% range two years ago. But they’re in line with rates buyers paid 20 years ago and lower than what buyers paid 30 years ago, according to data from mortgage lender Freddie Mac.

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Realtors say that with the Federal Reserve’s interest rate hikes, buyers shouldn’t expect those cheap money days to return anytime soon, if ever. They noted buyers can refinance later if rates do drop.

“People have to adjust to the changing rates of today,” Rabas said.

Should I wait to buy?

There is no right answer that will apply to every buyer, but for most buyers, the answer is likely no.

Both Rabas and Moore said some buyers in 2020 decided to wait out the frenzied market in the hopes rising prices would falter and the market would cool down. Sales have declined, but that hasn't made finding a home any easier.

“All that’s happened is prices continued to go up and interest rates have gone up,” Moore said. “People are no longer waiting for the market to crash.”

Rabas said inventory woes aren’t likely to go away anytime soon and some buyers simply cannot wait, either because of a growing family, a job in a new city or another change.

She suggested buyers talk with their mortgage banker and Realtor about what monthly payment they can afford in order to determine what homes are in their price range.

“We don’t know what the future holds, but if you actually need to buy, waiting doesn’t help anybody,” Rabas said. “People can fixate on the sales price, but buyers should focus on the monthly payments. It doesn’t matter if it’s 7% (interest) or $300,000 (price), it’s what’s my monthly payment and can I afford it?”

Contact Jeff Bollier at (920) 431-8387 or jbollier@gannett.com. Follow him on Twitter at @JeffBollier. 

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This article originally appeared on Green Bay Press-Gazette: Green Bay area home buyers face challenging market conditions