Many of you are asking about inventory and why does it continue to be low. To answer this question it’s helpful to look at two traditional sources of inventory and how supply from each of these sources has changed over time. Here's a quick look at each of these sources right now.
Foreclosures
Even before the pandemic arrived, Dane County foreclosures were trending along historically low levels. Now, as we enter 2022, there are only a handful of foreclosures occurring each month. Certainly these numbers will rise as we emerge from the pandemic, but we don't expect the rise to be significant. This is good news for our economy and our community, but for those of you looking to buy a foreclosure the opportunities will continue to be limited.
New single family home and duplex construction
Right now we have more than 1,000 new homes and duplexes begin built each year in Dane County, but this pace is only about 50% of the pace that occurred during the new construction peak in the early 2000s. What's not shown here are the numbers for condos. Although we don't have historical data for new construction condos, we can say with absolute certainty that the supply from this important source of inventory is only a tiny fraction of what it used to be.
Supply is tight, but our population is growing.
Clearly, supply is tight, but our population is also growing -- as Dane County continues to be the fastest growing region in the state. We fully expect this trend to continue as more and more people move to the Madison area for economic, quality of life, and climate-related reasons.
How do these trends impact you?
Although all real estate cycles go through their peaks and valleys, we believe real estate will continue to be a scarce resource here in Dane County -- for years, and perhaps even decades. We believe now, perhaps more than ever before, that those who own real estate will be those who build wealth. For those of you who have not yet become homeowners, we encourage you to continue to work toward this goal, knowing that you can build a better future for yourself by owning real estate.
What do these trends mean for our team?
All of these trends make it clear to us that we need to continue to support homeownership programs like Habitat for Humanity, Home Buyers Roundtable, and Own It. We also need to continue to fight for all of our clients desiring to own real estate. One of the best activities we can engage in as real estate professionals is to help more of you become homeowners.
Do you have questions about the market and how it impacts you and your goals?
We're always up for a conversation. Please reach out to us anytime you'd like to chat with one of our real estate professionals. We're here to serve you, your friends, and your family in 2022 and for many years to come.
