The complicated Marathon County housing market

Prices continue to soar, bucking trends on the West Coast; but numbers of sales plummeted toward the end of 2022

The housing market in the Wausau/Marathon County area has continued to baffle me. When the pandemic hit, I thought surely home sales would taper. Would people really be out looking for houses when otherwise everything was on lockdown and no one knew exactly what would happen with this crazy virus?

Turns out: Yep. Sales numbers statewide and around here took a slight flinch in those first few months, dropping a couple of thousand at most, before rebounding and then exploding.

And that’s just the raw numbers of sales. Prices year over year continued to rise, continuing a trend that had started years earlier. The median home sale prices in March 2020 was nearly $24,000 more than it was in 2019. That didn’t change at all the months that followed as well.

It didn’t impact the numbers either, overall. 2020 was a record year for numbers of homes sold in the state (80,367), and 2021 beat that record (91,453).

All that was the same in Marathon County. Record high sales in 2020 (1,889) following by another record in 2021 (1,900). The median home price hasn’t dipped since 2011 for the year - each year has set a new record in the county.

But as we’ll see, 2022 was a bit different.

The 2022 change

Financially, 2022 was a terrible year (and for those savvy investors, an enormous opportunity). The stock market saw one of its worst years in decades, crypto markets dove into bear territory with major centralized actors such as FTX collapsing, and it’s the year that real estate finally ended its seemingly unending bull market.

On the West Coast, anyway.

In Marathon County and statewide, prices have yet to falter. As stated above, home prices haven’t seen a year over year dip since 2011. That year, the median home sale was $114,000. In 2022, that number had reached $215,100. Statewide the median home price in that time period more than doubled, from $131,000 to $264,000.

But that hasn’t been the case for sales. Both statewide and in our county, numbers of sales have been dropping since mid-2021. And while 2021 overall still saw an increase year over year of home sales because of a strong first half, 2022 overall saw the first dip in the total number of home sales since the market began its tear.

In Marathon County, only 1,623 home sold for the year, a number lower than any since 2014. Statewide 78,143 homes sold, the least since 2015.

As is evident from the above chart, sales especially clipped off toward the end of last year.

What’s going on here? Why the sudden dip?

The shelves are bare

All signs point to inventory vs demand. Were demand low, the median sale price would be declining; and it’s pretty clear that the prices continue to rise month over month and year over year, and have only recently dipped in Marathon County.

It also points to what city leaders have been saying about housing in particular — there’s a general lack of it. Community Development Director Liz Brodek says more recent housing studies have shown a lack of both affordable housing and high-end housing. That lack squeezes the middle inventory, which is much of Wausau’s housing stock.

Statewide, that seems to be the case. Newly listed homes fell more than 30% in 2022 year over year, according to Redfin (which took data from the MLS system). And total homes for sale fell nearly 23%. You can see the line is trending downward.

Increasing inventory will become more important as the population grows. Wausau’s latest population count, taken in the last U.S. Census, was 39,994, and is projected to have already surpassed the 40,000 mark (projections put Wausau’s current population at 40,261 though how accurate that could be is anyone’s guess).

There are also a number of forces that could be coming Wausau’s way. Layoffs at major tech firms are becoming rampant, and could trickle down to the economy at large. And the housing market crash that’s starting on the West Coast also will likely make its way here and throughout the Midwest. A real estate investing firm I’m invested in, Lofty AI, has significantly scaled back its appreciation estimates on properties if offers, for instance. And those are primarily located in the Midwest.

The sharp decline in sales at the end of 2022, but it remains to be seen what it’s a signal of. Perhaps opportunities for buyers, if inventory can increase (and those interest rates are eventually brought down).

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