Brian Dake

It’s been quite a run for the Wisconsin real estate market this summer as the re-opening of the state’s economy in June combined with record-low mortgage interest rates resulted in a new three-month record in home sales, according to the most recent analysis of the state housing market by the Wisconsin REALTORS^® Association (WRA).

Focusing on the August 2020 market, sales rose 0.7% relative to August 2019. At the same time, tight inventories drove median prices up 14.1% to $235,000. On a year-to-date basis, existing home sales were just 1% below the first eight months of last year, and median prices rose 8.8% to $219,500.

A review of summer home sales indicates growth of 2.8% compared to the June-through-August period of 2019. Although June home sales saw a modest decline relative to that same month in 2019, very robust sales growth in July and a slight improvement in the August market pushed summer home sales to 27,795, which is the strongest summer sales volume on record for the state.

“We’ve seen remarkable resilience in this market, given the strong headwinds we faced this year,” said WRA Chairman Steve Beers, noting low inventories have kept the state in a strong seller’s market for the last three years, which has limited buying opportunities. Moreover, the recent COVID-induced recession effectively shut down the housing market in the latter part of the spring. “The good news is that mortgage rates have never been lower,” said Beers. The 30-year fixed-rate mortgage continued its downward trend, falling to 2.94% in August, setting a new record low for the fifth straight month, and that has really fueled housing demand.

Gov. Tony Evers announced Friday that he has asked for and received the resignation of Department of Workforce Development (DWD) Secretary Caleb Frostman. Frostman’s resignation is effective immediately.

“People across our state are struggling to make ends meet, and it is unacceptable that Wisconsinites continue to wait for the support they need during these challenging times,” said Evers. “It is clear that our unemployment system has faced historic levels of claims these past few months, hindered in part by antiquated technology we inherited, and processes designed by Republicans to make it harder for folks to get these benefits.”

More than 130 DWD employees have been reassigned to the Unemployment Insurance Division, according to Evers. In total, the DWD now has more than 1,500 individuals working on UI cases, a 250 percent increase from 600 individuals previously, according to Evers.

“We have continued to add additional state resources to support the DWD, but it is clear that we must have change if we are going to address these problems to get folks their benefits faster,” he said.

Department of Corrections (DOC) Deputy Secretary Amy Pechacek will lead the transition until the new DWD secretary is appointed.

Wisconsin added 16,700 private sector jobs from July to August, a 0.7% increase, and the state’s unemployment rate dropped from 7.1% to 6.2%, according to U.S. Bureau of Labor Statistics data released yesterday by the Department of Workforce Development.

Wisconsin’s unemployment rate is still below the national average, which was 8.4% in August. Wisconsin’s unemployment rate saw the largest jump from 3.1% in March to 13.6% in April. The unemployment rate has steadily declined since May (12.1%) and June (8.6%).

The state’s labor force participation rate was 65.4% in August, which is higher than the nation’s labor force participation rate of 61.7%.

So far, the state has recovered 206,900 jobs, which places Wisconsin at the halfway point of recovering total jobs lost (395,800) since the COVID-19 pandemic took hold.

The Federal Reserve concluded its final policy-setting meeting before the November presidential election on Wednesday with a renewed pledge to hold interest rates near zero and keep them there until inflation is consistently rising.

The U.S. central bank, as widely expected, held the benchmark federal funds rate at a range between 0 percent and 0.25 percent, where it has been since mid-March. Updated guidance shows that Fed officials expect rates to remain near-zero through 2023. Officials also changed their projections to reflect a smaller decline in the nation’s GDP and a lower unemployment rate of 7.6% at the end of 2020.

The economic projections from individual Fed members showed that a majority of policymakers expect to keep the benchmark federal funds rate at near zero through the end of 2023. One official saw rates increasing in 2022, and four officials saw them increasing in 2023.

“With inflation running persistently below this longer run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” the Fed’s post-meeting statement said.

Sales at retail stores across the country rose in August for the third month in a row in another display of the economy’s resilience.

Retail sales are a big part of consumer spending and typically increase when the economy improves and Americans feel more confident to spend. Sales have exceeded precrisis levels since June, a remarkable turnaround that few economists would have predicted early in the pandemic.

Sales rose 0.2% at auto dealers, which account for about one-fifth of all retail spending. Gas station receipts also increased 0.4%, largely reflecting an increase in the cost of gasoline.

Sales rose 4.7% at bars and restaurants as people went out to eat more or ordered more takeout. Higher spending at restaurants even in the face of ongoing limits on indoor seating is a good sign. People tend to spend less at restaurants when they are more worried about the economy.

Sales rose more modestly at home centers, pharmacies, electronic and appliance stores and clothing outlets.

Governor Tony Evers announced $8 million will be set aside to help the struggling tourism industry during the coronavirus pandemic.

The grant money is funded through the CARES Act and will be administered by the Wisconsin Department of Tourism.

“The tourism industry is among the hardest hit by COVID-19,” said Gov. Evers. “The TRAVEL grants are designed to sustain local operations, staffing, and relief stimulus activities to drive immediate spending and reinforce safe travel in support of local businesses across the state.”

Two types of grant funding will be available through the TRAVEL grants: funds to support the continuation of operations due to impacts of COVID-19 and marketing funds to promote a safe and healthy experience for travelers and resident consumers amid the COIVD-19 public health emergency.

The Department of Tourism is accepting applications online now through 4 p.m. on Sept. 28 and grants will be announced by late October.

Wisconsin residents receiving an extra $300 in weekly unemployment benefits are being asked to pay back the money if Congress enacts new legislation to replace the jobless aid created by President Trump’s executive action last month.

A spokesman from the Wisconsin Department of Workforce Development said the state is following guidance from the Federal Emergency Management Agency, which is funding Trump’s Lost Wages Assistance program, and the Department of Labor. FEMA, however, said that states administer the program while the agency provides the funds.

The $300 weekly benefit is retroactive to Aug. 1 for workers who qualify. Wisconsin’s DWD doesn’t anticipate that it will be forced to claw back the aid from claimants, although its own website posted the warning to out-of-work residents who tried to file unemployment claims.

It remains unclear whether future aid from Congress will be made retroactive to Aug. 1, meaning the payments would overlap, a spokesman said.

The DWD is anticipating that if Congress passes new legislation, it will begin once Trump’s Lost Wages Assistance program lapses for the week ended Sept. 5 so that there would be no overlap, they added.

The state’s transportation fund took in almost 5 percent less in 2019-20 than was expected, driven largely by people driving less amid the COVID-19 pandemic.

According to the Legislative Fiscal Bureau, the transportation fund took in nearly $1.9 billion over the fiscal year, about $97.3 million less than what the state expected when Gov. Tony Evers signed the budget in July 2019.

For the year, motor fuel taxes came in $69.1 million less than had been expected, a drop of 6.4 percent. The state also took in $45.8 million less than it had projected for registration and title fees, a decline of 6.9 percent.

Those shortfalls were partially offset by boosts elsewhere. For example, the transfer from the petroleum inspection fund, funded with a fee of 2 cents per gallon of fuel sold, was $16 million higher than expected.

The transportation fund also received $8.5 million more in miscellaneous department revenue and earned an additional $3.4 million on investments than had been projected.

Over 60 business associations, non-profits and local chambers of commerce, including Wisconsin Independent Businesses, sent a letter to lawmakers on Wednesday asking them to sign on and support legislation that would shield Wisconsin businesses, schools, universities and other entities from the threat of predatory lawsuits alleging liability for COVID-19 exposures.

The bill – LRB-6434/2 – is currently being circulated by Sen. Chris Kapenga (R-Delafield), Rep. Mark Born (R-Beaver Dam) and Rep. Dan Knodl (R-Germantown).

“The legislation would create a safe harbor for all property owners/occupants who are good actors against frivolous lawsuits alleging a plaintiff was infected with COVID-19 at a specific premises,” the letter reads. “The bill is not business community specific and would protect homeowners, non-profits, schools, universities, and any other premises including outdoor events and festivals. The safe harbor would not protect bad actors. An entity would lose the liability exemption if they knowingly violated a public health order or spread COVID-19 by acting in a reckless, wanton, or intentional manner.”

The 60-plus organizations call on the legislature to act quickly to protect businesses, non-profits and individuals who are doing the right thing, while ensuring bad actors could still be held liable.

 The Senate prepared to vote this week on a trimmed-down Republican coronavirus relief package, though it only has a slim chance of passage in the face of Democrats’ insistence for more sweeping aid.

Senate Majority Leader Mitch McConnell released the approximately $500 billion measure on Tuesday as senators returned to Washington for an abbreviated pre-election session, but hopes were dimming for another coronavirus relief bill — or much else.

McConnell’s bill would provide $105 billion to help schools reopen, enact a shield against lawsuits for businesses and others that are powering ahead to reopen, create a scaled-back $300-per-week supplemental jobless benefit, and write off $10 billion in earlier debt at the U.S. Postal Service. There’s $31 billion for a coronavirus vaccine, $16 billion for virus testing and $15 billion to help child care providers reopen. There is additionally $20 billion for farmers.

Democrats demanded a far larger bill, including hundreds of billions of dollars for state and local governments, more generous jobless benefits, and help for renters and homeowners, along with other provisions in the House Democrats’ $3.5 billion relief bill that passed in May.