Here's our latest update on the Madison area real estate market -- and without any of the spin. Do you have questions about how the market impacts you and your real estate goals? Contact our realtor team for a helpful conversation.
Madison area home prices
The price per square foot increased from $197 in December of 2021 to $216 in December of 2022. That's an increase of 10 percent year-over-year. Why do prices continue to rise in Madison and Dane County? One key reason is fewer homes are being listed for sale, which we cover in the next section below.
New MLS listings
Only 133 Dane County single family homes were listed for sale in the month of December, a decrease of 30% from last December, and the lowest total on record for the month. New listings have been entering the market at a subdued pace since the month of July. Many homeowners have not been in a hurry to sell due to the recent rise in mortgage rates.
Dane County housing starts
Another factor limiting supply in the Madison area is the slow pace at which new homes are being built. Only 65 housing starts were initiated last month, which was the lowest total for any month of December in the last 10 years. Thank you Dominic Collar from MTD Marketing Services of Wisconsin for making this data available. For more information, please contact Dominic at 920-450-6131.
Dane County foreclosures
Low foreclosure activity is yet another factor contributing to low supply in Dane County. Only 14 filings were initiated in December, which was the 3rd lowest total for the month.
Available inventory
Although active listings in Dane County are up from the same time last year, they still remain low by historical standards. As of January 8th, only 385 single family homes were available for sale in the Madison area.
Available listings have increased because fewer people are choosing to buy. For some buyers, a window of opportunity is opening up as inventory gradually grows.
Accepted offers
Buyer activity has decreased with the recent rise in mortgage rates. Accepted offers decreased by 32% in December, and registered the lowest December total since 2010.
Home sales
December Madison area home sales (or closings) decreased by 42% year-over-year.
Competing offers
Our preliminary data for the month of November shows that 33% of the homes that went under contract in November received multiple offers. This is a very high percentage for this time of year -- and well above the pre-pandemic percentage from November of 2019. The high level of competition that we are experiencing right now is a sign that 2023 will be another year of strong prices and heavy competition. We don't have any competing offer data available for 2023 yet, but we are observing a high percentage of listings receiving multiple offers in the new year.
Days on market
Days on market are beginning to rise (slightly). In the big picture, marketing times remain very low. The average days on market in December was only 33 days.
Expired listings
More listings are expiring without selling, but in the big picture expired listings are still a relatively rare occurrence. Fifty-six single family home listings expired without selling in December, compared to 45 listings the year before.
Listing expiration rate
A high expiration rate indicates a buyers' market. A low expiration rate indicates a sellers' market. The listing expiration rate is beginning to rise in the Madison area, but it's still very low by historical standards. And it confirms that the market we're in right now is actually one of the strongest sellers' markets that we've experienced this century.
Where will the Madison area real estate market go from here?
Here in Dane County, we're anticipating another year of low inventory and strong prices, and we believe that these will be the two major themes in our market for the foreseeable future. For much more background and information, we invite you to check out our 2023 predictions here.
