Multifamily Real Estate Trends:
The report below covers the latest trends for income properties in Madison and Dane County, Wisconsin. Our report covers gross rent multiplier, price, sales, inventory, days on market, and other trends in the multifamily real estate market. All data comes from the South Central Wisconsin MLS database. Below is a snapshot for our September, 2019 report.
View all listed Madison area income properties for sale here.
Dane County Multifamily Real Estate Overview
- The Madison area gross rent multiplier through September is near historic highs.
- The multifamily average price per unit reached a new high through September, 2019.
- Only 2 months of income property supply are available for sale on the MLS. as of October 3rd, 2019. This low level of supply is helping to push local GRMs and local prices higher.
- Multifamily sales have plateaued in recent years due to low inventory. Sales through September are even with last year.
- Expired listings are beginning to rise but are still trending near record lows through the month of September.
- The rental property listing expiration rate has risen slight off historic lows.
- New multifamily listings continue to enter the market at a slow pace through the month of September.
- Days on market for investment properties are beginning to rise - but remain low compared to most other years in the recent past.
Dane County Gross Rent Multiplier - September, 2019
The gross rent multiplier (GRM) measures a rental property's sales price relative to its income producing potential (sales price/gross annual income). A market with low GRMs indicates an environment where investors can purchase at good values. A market with rising GRMs indicates one where properties are becoming more expensive.
Madison area gross rent multipliers have been trending higher after bottoming out in 2012. The average GRM through the month of September was 9.9, an historically high number. Low supply and high demand have been pushing local prices and local GRMs higher.
On an annual basis, the Dane County GRM ended the 2018 year at 9.5.
Multifamily Average Price per Unit - September, 2019
The Dane County income property price per unit has been trending higher. Year-to-date through September, the average price per multifamily unit is $129,579 - the highest on record.
On an annual basis, the multifamily price per unit ended the 2018 sales year at $121,942 - the highest ever.
Dane County Multifamily Inventory - October, 2019
The table below is a snapshot of the local rental property market taken on October 3rd. Overall, there are only 2 months of supply available for sale in the Dane County multifamily real east market. Also, 40% of all Madison area multifamily listings have an accepted offer. These stats indicate a high demand/low supply market.
Dane County Multifamily Sales - September, 2019
So far this year, investment properties are selling at the same pace as last year. Year-to-date through September, a total of 212 Dane County multifamily listings sold via the South Central Wisconsin MLS. Note, sales would be higher if more inventory were available on the open market. Right now there is a large, pent up demand for multifamily real estate in the Madison area.
On an annual basis, a total of 283 multifamily listings sold via the MLS in 2018. This was a decrease from each of the two previous years.
Dane County Expired Multifamily Listings - September, 2019
A total of 55 Dane County income property listings expired year-to-date through the month of September. This represents the second lowest expired listing total on record. This is one of many indicators which point to a good seller's market for investment properties in the Madison area.
A total of 57 rental property listings expired in 2018 - the second lowest expired listing total on record.
Income Property Expiration Rate - September, 2019
The year-to-date expiration rate for Madison area multifamily listings is only 21%. This represents the fourth lowest year-to-date expiration rate on record. In contrast, the 2008 expiration rate was 79%.
The annual income property listing expiration rate in 2018 was only 17%. This was the second lowest expiration rate on record.
New Dane County Income Property Listings - September, 2019
Year-to-date, only 277 multifamily listings were posted to the MLS through the month of September. A low supply of fresh incoming listings has helped to shape a seller's market for multifamily properties in the Madison area.
A total of 359 income property listings were posted to the MLS in 2018. This was slightly above the record low for the Dane County market.
Dane County Multifamily Days on Market - September, 2019
Year-to-date through September, the average days on market for Madison area rental properties was 35 days - up from last year's 26 days.
The annual average days on market for all of 2018 was only 28 days - which was the lowest annual average dating back to the year 2000.
About the Author
Dan Miller is a licensed real estate salesperson with RE/MAX Preferred in Madison, Wisconsin. Contact Dan with any questions you have about buying, selling or investing in the Dane County area. This market report will be updated several times throughout the year. Check back often for an update on the latest trends in the local investment property market.