Madison area homes prices increase 13% in November

With so many confusing headlines in the world of real estate, it can be hard to know who and what to believe. Our latest market update offers plenty of insight into the Madison area real estate market -- and without any of the spin. Here's our single family home report for the month of November, 2022. 

Madison area home prices

The price per square foot increased 13 percent year-over-year, while the median price increased 10 percent. Why do prices continue to post double-digit increases? One big reason is fewer homes are being listed for sale, which we cover in the next section below. 

New MLS listings

Only 235 single family homes were listed for sale in the month of November, a decrease of 33% from last November, and the lowest total on record for the month. New listings have been entering the market at a subdued pace since the month of July, as many homeowners have been hesitant to sell due to the recent rise in mortgage rates.

Dane County housing starts

Another factor limiting supply in the Madison area is the slow pace at which new homes are being built. Only 75 single family home building permits were initiated last month, which was a 32% decrease from last November. Thank you Dominic Collar from MTD Marketing Services of Wisconsin for making this data available. For more information, please contact Dominic at 920-450-6131. 

Dane County foreclosures

Low foreclosure activity is another factor contributing to low supply. Only 25 filings were initiated in November, which was the 4th lowest total for the month dating back to the year 2000.

Available inventory

Although active listings in Dane County are up from the same time last year, they still remain low by historical standards. As of December 9th, only 444 single family homes were available for sale in the Madison area. 

Accepted offers

Mortgage applications are down by about 40% and accepted offers are, too. Accepted offers decreased by 42% in November, and registered the lowest November total since 2011. 

Home sales

November Madison area home sales (or closings) decreased by 30% year-over-year.

Competing offers

Our preliminary data for the month of October shows that 35% of the homes that went under contract in October received multiple offers. This is a very high percentage for this time of year -- and well above the pre-pandemic percentage from October of 2019. The high level of competition that we are experiencing right now is a sign that 2023 will be another year of strong prices and heavy competition, too. 

Days on market

Days on market are beginning to rise (slightly) but still remain very low by historical standards. The average days on market in November was only 27 days. 

Expired listings

More listings are expiring without selling, but the number is still very low compared to most other years dating back to the year 2000. 

Listing expiration rate

What is the listing expiration rate? As a formula, the listing expiration rate is:

(# of listings that expire)/(# of listings that expire + # of listings that sell)

A high expiration rate indicates a buyers' market. A low expiration rate indicates a sellers' market. The listing expiration rate is beginning to rise in Dane County, but it's still very low by historical standards. And it confirms that the market we're in right now is actually one of the best sellers' markets that we've experienced since the year 2000.

Our predictions for the 2023 Madison area real estate market

We're predicting another year of low inventory and strong prices, and we believe that these will be the two major themes in our market for the foreseeable future. For more background and information, we invite you to check out our 2023 forecast here.