It's that time of year for our annual real estate predictions. Here are 7 key reasons why we see low inventory and strong prices for Madison and Dane County in 2023.
On the demand side
Rapid population growth
Dane county is already the fastest-growing region in the state, and according to the Capital Area Regional Planning Commission, our population is projected to grow by more than 200,000 residents over the next 30 years.
National reputation
For the second straight year, the city of Madison was recently named by Livability as the #1 best place to live in America. It's rankings like these that have put Madison on the map. In a mobile culture like ours, where people can choose to live and work from just about anywhere, Dane County has quietly become one of the top relocation destinations in the country.
Climate change
Climate change and Madison's reputation as a "climate haven" are enhancing our region's status as a desirable place to live. More and more we're hearing from people who are choosing to relocate to Madison due to the impact of climate change in the southeast, southwest, and western regions of the country.
On the supply side
A lack of fresh home supply
New home construction has fallen far behind what is needed to satisfy the demand for homes in our area. Construction levels have been subdued for the last 17 years, which is one of the reasons why our region has gone from overbuilt (in 2008) to underbuilt (in 2022).
A lack of fresh condo supply
New condominium construction has come to a near standstill in Dane County. For the last 10 years, developers and financial institutions have been favoring apartment projects over condominium projects, which has led to a shortage of condos in the Madison area.
A lack of foreclosures
This may come as a surprise to some, but foreclosures are occurring at a very slow pace in Dane County. Foreclosures may rise slightly soon, but all-in-all we expect foreclosure activity to be low for the foreseeable future. Most homeowners are enjoying good equity and low mortgage rates right now, which should limit the number of distressed sales we see in Dane County.
10 years of historically low interest rates
From 2012 to 2021, homeowners and investors acquired real estate under very favorable terms, and refinanced at even better terms when mortgage rates dipped lower. Now that interest rates are higher in 2022, many property owners are reluctant to sell when they're currently enjoying such low, monthly payments. For this reason we expect listing activity to be light in 2023.
Are you wondering how the market impacts you and your real estate goals?
We think it's important to recognize that all of the trends above have long-term implications that are likely to impact our market for many years to come. So, we encourage you to take the headlines you see in the national media and in social media with a grain of salt. Remember, those headlines are designed to stir our emotions and drive online traffic.
At Mad City Dream Homes we're always prepared to have a conversation about our local market conditions and how our local market impacts your goals. So, please feel free to call on us whenever you're in need of a conversation. We would love to be a resource for you and help you plan for your future.
