Dane County home prices were up significantly in the month of June. At the same time, we see clear signs of a market trending toward more balance, where there will be a lot more give and take between buyers and sellers in the months ahead. Here's our latest single family home update -- covering the month of June, 2022.
June Dane County home prices
The price per square foot was up by 15% year-over-year and 15% year-to-date. Note the average price per square foot has increased by 34% from June of 2019 to June of 2022. To put this in perspective: if you purchased a home for $300,000 three years ago, your home is worth approximately $400,000 right now.
Single family home inventory
One reason prices have continued to rise is perpetually low levels of supply. As of July 11th, only 522 single family homes were available for sale (without an accepted offer) in Dane County. This is a low number by historical standards. At the same time, supply is clearly moving higher this summer.
Accepted offers
Inventory is rising once again because mortgage applications, property showings, and accepted offers are decreasing. Accepted offers decreased by 21% last month and were the lowest for any month of June since 2014. The decrease in buyer demand right now means we'll experience fewer sales, fewer competing offers, longer marketing times, and more subdued price growth in the months ahead. In other words, the market will become more reasonable and more rational for buyers in the coming weeks.
New MLS listings
New listings continued to enter the market at a slow pace in June, decreasing by 8% year-over-year and by 8% year-to-date. Through the first 6 months of the year, new listings entered the market at the slowest pace for any year since 2001. Even though buyer demand is decreasing, the low supply of fresh listings will help to maintain elevated prices in the months ahead.
Home sales
Madison area home sales decreased by 15 percent in June and by 9 percent through the first six months of the year. We expect lower home sales to be a continuing theme based on current mortgage application, property showing, and accepted offer trends.
Competing offers
Our preliminary data for the month of May shows a very high percentage of Madison area listings receiving multiple offers. However, we expect competing offers to decrease throughout the year as buyer activity decreases and inventory increases.
Days on market
The average days on market reached a new low in the month of June, but we fully expect marketing times to increase in 2022 based on all of trends we are observing in the market right now.
Our outlook for the rest of 2022
Home sales, competing offers, and price growth will moderate in the months ahead. At the same time, marketing times will increase noticeably. All of these trends point to a much more balanced market for the rest of 2022, where buyers and sellers will benefit by hiring a realtor with the right market, pricing and negotiation expertise.
Also, there's no doubt higher interest rates and inflation are creating fear in the market right now, but a more balanced market also offers many buyers and sellers some real opportunities. Stay tuned. We'll have a lot more to share on this topic in the days ahead.
