Right now new Dane County listings are entering the market at a very slow pace.
Take single family homes, for example
Only 235 new listings were posted to the MLS in November, which was down 32% from a year ago, and was the lowest total for any month of November on record (our data goes back to 1999).
And Dane County condos
Only 74 new condominium listings were posted to the MLS in November, which was a decrease of 28% from a year ago, and the second-lowest total on record for the month.
Why are listings trending lower?
One huge reason is our recent history with mortgage rates:
From 2012 to 2021, homeowners and investors acquired real estate under very favorable terms, and refinanced at even better terms when mortgage rates dipped lower. Now that interest rates are higher in 2022, many property owners are reluctant to sell when they're currently enjoying such low, monthly payments. For this reason we expect listing activity to be light -- and prices to remain strong -- in 2023.
We see 6 other market forces at work which will drive supply lower and prices higher, and we've outlined all of them for you in our latest real estate predictions.
So, what's our advice for you heading into 2023?
If you're hoping to buy, we think it's important for you to recognize that waiting for prices and mortgage rates to fall is a strategy that's not likely to work. There are just too many market forces at play which point to low inventory and high prices for the foreseeable future.
Instead, we recommend you begin your search now. And when you see a chance to buy your dream home -- which might require some patience on your part -- then go for it. By paying down the principal on your mortgage, by taking good care of your home, and by tending to your home's appreciation over the long run, you can start building equity sooner rather than later. And that equity will help you move up to your next home a few years down the line. Also, when interest rates do fall at some point in the future, you can refinance your mortgage and lower your monthly payment.
If you're planning to sell, we think it's important for you to know that it's still a tremendous market for sellers. In fact, year-over-year prices are still rising here in the Madison area. Yes, it's a nuanced market that has changed in many ways from the market earlier this year, but many homeowners continue to experience very successful sales that are attracting record-high prices.
So, although we are bombarded daily with negative headlines from the national media and on social media, we encourage you to take all of those headlines with a grain of salt. Remember those headlines are designed to rile us up and ultimately, sell us something. We encourage you to follow local trends that come from trusted, local sources.
Here at Mad City Dream Homes, we are here to serve as a trusted resource for you, your friends, and your family -- and we would love to hear from you whenever you're in need of a real estate conversation. Please feel free to call on us whenever you could use some clarity and a little help.
