Madison area home prices up 14 percent in October

Here's our latest scoop on the Dane County single family home market. Do you have questions about home values in your neighborhood? Contact your Mad City Dream Homes realtor for a helpful conversation. 

Dane County home prices

This may come as surprise to some: The price per square foot jumped from $191 in October of 2021 to $218 in October of 2022. That's an increase of 14 percent. Year-to-date, Madison area home prices are also up by 14%. This recent blog post offers a closer look at all of the latest home price trends in Dane County.

New MLS listings

One big reason prices remain high is the lack of fresh supply. Only 396 Dane County homes were listed for sale on the MLS in the month of October, which is the lowest total on record for the month (our data goes back to 1999). New listings have been especially low since the month of July, as many homeowners have been reluctant to sell due to the recent rise in mortgage rates.

Dane County housing starts

Another factor limiting supply is the relatively slow pace at which new homes are being built. Only 85 new construction permits were started last month, which was the 6th lowest total for the month dating back to the year 2000. 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. 

Single family home active inventory

Home supply is up by more than 40% across the country, but that's not the case in Dane County. Locally, listings are up by only 14%. Active listings remain very low from an historical perspective, a trend that continues to benefit sellers.

Accepted offers

Fewer buyers are applying for mortgages, which means fewer buyers are writing offers. Accepted offers decreased by 35% in October, which was the lowest October total in 10 years.

Dane County home sales

Madison area home sales (or closings) decreased by 31% in the month of October.

Competing offers

Our preliminary data for the month of September shows that 37% of the homes that went under contract in September received multiple offers. This is a very high percentage for the Fall season. Although buyers are more selective and discerning compared to buyers from a few months ago, they are still eager to compete when they find the home they love.

Days on market

Marketing times continued to trend near historic lows in October; however, we do expect days on market to increase due to the recent rise in interest rates. 

Expired listings

For a long time, we had stopped reporting on expired listings, because the market was so hot that virtually every home sold. Now that the market is mellowing, we are beginning to see expired listings increase once again. 

Listing expiration rate

We've decided it's time to rekindle this statistic, as well. 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.

This statistic helps us put all of the doom and gloom headlines into perspective. The market we're in right now is actually one of the best sellers' markets we've experienced since the year 2000.

Making sense of the Madison area real estate market

This is a bit of a tricky market that's hard to summarize in a simple infographic. So, here's our best shot at a summary with a few basic bullet points:

• Fewer people are buying right now, but fewer people are selling, too. So inventory remains low. 
• Some sellers are struggling to adjust to the changing market, and a higher percentage of listings are expiring.
• Although buyers are more choosy right now, they're also very willing to compete when they find the home they love. 
• The sellers who apply the fundamentals of professional staging, smart pricing, and smart cosmetic updates are still attracting multiple offers and still selling for very high prices. All-in-all this is still one of the strongest sellers' markets we've experienced since the year 2000.