Are you putting off your home-buying plans until the market becomes less competitive? You could end up waiting a long time. We anticipate 2022 will be extremely competitive for Madison area home and condo buyers, much like the market we've experienced in 2021.
Our rationale?
The percent of listings receiving multiple offers right now is off the charts compared to prior years, which suggests to us that there is still a very large pent up demand for real estate in the Madison area. Here's some historical context:
2019
The chart below shows the month of April was the most competitive month for home buyers in 2019, with just under 36% of all single family listings receiving multiple offers. Up until 2019, this was a pretty typical pattern, with multiple offers occurring most frequently in the springtime, and then trailing off during the second half of the year.
2020
In 2020, the pandemic arrived and the pattern changed. The percent of listings receiving multiple offers jumped noticeably higher in June -- and remained elevated for the rest of the year.
2021
Then in 2021, the percent of listings receiving multiple offers jumped noticeably higher once again. This year's market has been ultra-competitive all year long (especially in the springtime), with bidding wars occurring much more frequently than in any previous year. This year's historically high number of competing offers tells us that there are many buyers in the Dane County area who are still searching for the right home.
Looking ahead to 2022
With historically low interest rates and with so many buyers still in search of their dream home, we expect the demand for real estate will be very strong in 2022. Because of this, we're strongly encouraging our clients to consider buying this fall or winter, instead of waiting and trying to buy with the herd next spring.
What could cause competition to decrease in 2022?
Higher interest rates. Many are forecasting interest rates to edge higher in 2022, although not by much. Regardless of what happens to mortgage rates, our population will continue to grow in Dane County while the supply of new listings will remain low. We believe these two trends will lead to more price appreciation in the years ahead, and real estate will continue to be a great long-term investment.
Do you have questions about buying or selling in the year ahead? Contact one of our full-time real estate professionals. We're always available to talk real estate and share our honest opinions and advice.
