We just put the finishing touches on our latest single family home and condo reports, and as expected, rising prices and low inventory continue to be the two major themes in this year's real estate market. But how long can this sellers market in Madison last? We expect the market to favor sellers for a long time, and we explain why below.
Why Madison is a long-term sellers market
The short and simple answer is the Madison area has many more people wanting to buy than owners willing to sell. We know this from our day-to-day work in the field, and our review of local market data confirms this is much more than a hunch. Here are 3 reasons why we know the city of Madison has many more buyers than sellers.
#1: Competing offers are at an all-time high
Take a look at the graph below, which shows the percentage of listings receiving multiple offers. Competing offers continue to climb in Madison. Put another way, an increasing number of buyers are failing in their attempt to buy a home. The population of "frustrated buyers" is clearly growing in Madison.
#2: Days on market are at an all-time low
This graph shows Madison single family homes are selling at the fastest pace on record - more evidence of a market which has many more buyers than sellers.
#3: Listings are expiring at the lowest rate on record
This graph shows the percentage of listings that have expired in Madison - dating back to the year 2000. Very few listings are expiring in 2018, which is another sign of a market that is light with listings and heavy with buyers.
More about the sellers market in Madison
As we stated in this article last fall, we expect the imbalance between buyers and sellers to continue indefinitely. Why? Dane County continues to lead the state in population growth, while new construction lags at a slower pace. For example, the county grew by 6,200 residents in 2017 but added only 1,200 new single family homes.
Although it's impossible to know the exact number, we do know there are thousands of "reluctant renters" in Madison who would much rather be paying down their mortgage than paying their monthly rent. With so much pent up demand in the marketplace, we fully expect the sellers market to continue for the foreseeable future.
Every market presents its own challenges and opportunities. Whether you plan to buy or sell, we can help you make the most of this year's market. Contact us for a short consultation.
This article is published courtesy of: Dan Miller, REALTOR Mad City Dream Homes & RE/MAX Preferred