2nd Quarter 2006 Local Real Estate Market Summary

Dave Stark [PDF]:

The chickens came home to roost a little bit in the second quarter of 2006, as sales of both single family homes and condominiums were down in all markets and price ranges when compared to the same period last year. However, if we look at the full year thus far, we see that the pace of sales is still roughly the same as it was two years ago in 2004. Overall residential sales were down 9.3% for the full MLS, and down 12.1% in Dane County. Inventories have continued to rise as well. The problem, particularly for sellers, remains the same; inventories are double what they were two years ago, and 50% to 70% higher than last year.

Days of inventory remain much the same as they were after the first quarter. However, it’s interesting to note that the number of days of active inventory rose very little from 2004 to 2005, then nearly doubled between 2005 and 2006. Even though inventories started rising last year, the rising pace of sales kept average selling times and absorption rates fairly level. This year, even the relatively modest downturn in sales has caused inventories to really back up.

Dave Stark is a long time friend and client.

Midwest Airlines Expansion Plans

Steve Lott:

Midwest Airlines in the coming months will make several significant fleet decisions that will guide the carrier through a planned network and schedule expansion. This marks a significant turnaround for the airline, which barely averted bankruptcy three years ago.

Since its 1984 launch, Midwest was always known for its product and service, which was better than many of its larger competitors. The airline won praise from business travelers for its all-first-class seating and a full meal service, even on many of the shorter flights. Following the post-9/11 crisis, however, Midwest quickly realized that its product alone would no longer bring in the revenue premium it once received.

The carrier stumbled for several years but was able to win labor concessions and relief from aircraft lessors during the summer of 2003 that kept the carrier out of bankruptcy court. That same year, after facing a barrage of competition from low-cost carriers, Midwest diverged from its original strategy by adding seats to its MD-80 fleet and targeting leisure passengers with a new “saver service.” The carrier kept its Boeing 717 fleet in the traditional all-first-class “signature service.”