Real estate: Location, location, patience

How real is the real estate slowdown we keep hearing about? Well it's cost the presidents of Citigroup and Merrill Lynch their multi-million jobs in the past few days.

And it's not just those at the top, or mired in the subprime mortgage mess at the bottom, who are having trouble. The slowdown is very real right here in Racine, too. It affects home sellers, buyers and Realtors.

Houses are selling in Racine and Racine County -- but not as many of them as just a few years ago. And it usually takes longer, as almost anyone with a For Sale sign in his front yard can attest. Gone, too, are inflated prices. Says one Realtor, "It's a buyer's market."

In 2005, more than $1.1 billion worth of real estate was sold in Racine County -- commercial and residential combined. A year later, the total was $916 million, a drop of 16.6%. (These totals were computed based on the amount of real estate transfer tax collected by the County Registrar of Deeds.)

We're only three-quarters through 2007, but it's clear that no records will be set this year. We're on pace to fall short of last year's totals. Looking at nine-month figures for 2005, '06 and '07, we see: $863 million worth of real estate sold here in 2005; $701 million in 2006, a drop of 16.6%; and $654.7 million in 2007, a year-over-year drop of another 6.7%.

Again, that's both residential and commercial. Commercial totals can be impacted substantially by just a few sales. For example, the Sentry/Kohl's mall and outlots at the corner of Green Bay Road and Highway 20 sold in August for $31.7 million ... which makes a big bulge in the month's statistics, and also in the real estate transfer tax receipts ($95,000 total) which are split by the state and county, 80-20. Yes, we get the short end.

So far this year, 1,735 houses have been sold in the county. That's 21.5% fewer than in 2005, when 2,209 were sold in the first nine months. Similar declines are seen throughout the area: in Kenosha County, residential sales are down 19.7% in '07 vs. '05; Walworth County is down 25.9%; Waukesha County is down 9.8%; and Milwaukee County is down 20.6%.

And the length of time it takes for most houses that do find buyers to sell is getting longer and longer (reversing a trend here between 2001 and 2004, when the pace was speeding up). Of the 533 homes sold in the county in the July-September third quarter, 120 sold in less than a month; another 120 took between one and two months; 84 took three months; 67 took four months; and 142 took longer than four months.

Statistically, in Racine County, the amount of time it takes to sell a house increased 9.3% in 2005 over '04; 32.2% in 2006 over '05; and another 20.5% in 2007 over '06.

But even though it's a buyer's market -- with lots of houses available, stabilized prices and interest rates historically low, about 6.25% for a 30-year mortgage -- things aren't all grim for sellers. Said one Realtor: "If you price it fairly, you're going to sell it."

"All these figures are averages; houses still are selling."

Some other points to consider:

-- Foreclosures haven't been as prevalent in Racine County as in Kenosha and Milwaukee.

-- The sales slowdown may cause some Realtors to seek other employment. It's getting time to renew their board dues with the Racine County Board of Realtors, and for those who haven't sold many houses, the $500 fee may be something they decide to forego. The major firms require all brokers selling houses to be members (although the state does not).