U.S. Home prices are soaring and affordable homes are in short supply. Dane County is no exception as real estate agents are seeing an extraordinary demand for homes in the Madison area. Bidding wars between home buyers and increased home prices might make some first-time home buyers wary of purchasing this year; however, we’ve put together the most recent housing market data for Dane County and 6 tips to navigate the current Madison WI housing market to help make purchasing easier this year.
[Related: 5 Tips to Navigate a Seller’s Market]
Key Facts: Dane County Housing Market Data for July & August 2018
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Home inventory:
Currently, we have 1.5 months of inventory — down from the 1.8 months of supply last August — available in the Madison single-family market as of August 13, 2018. As a comparison, a healthy and balanced market would have around 6 months of inventory, meaning neither buyers or sellers are favored in the market. The current inventory is a strong indicator that we’re in a seller’s market, where sellers have the upper hand and homes are selling quickly. In July 2018, there were 863 new listings on the market, approximately 80 fewer listings than that same month in 2017. In total, there were 1,314 active residential listings at the end of July 2018, 50 fewer than in July 2017.
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Average & median sale price:
The average sales price for a home in Dane County in July 2018 was $324,073, a 7.5% increase from last year. The median July 2018 sales price in Dane County was $289,000, a 7% increase from last year.
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Median listing price:
In July 2018, the median listing price for residential homes and condos in Dane County was $360,600, a 7.4% increase from last year.
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Current average mortgage rate:
The current average mortgage rate for a 30-year fixed rate mortgage is 4.38%, with actual offered rates ranging from 3.50% to 7.39%. These rates can vary depending on the loan type, your credit history, loan amount, and down payment. Though these rates may seem high, they are still historically low. Just ten years ago, the average mortgage rate was 6.48% and 6.92% 20 years ago.
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Average duration on the market:
In July 2018, the average number of days a home was on the market was 25 days, a 17% decrease from last year’s 30 days.
In a nutshell, housing prices are increasing, while the number of homes for sale in Dane County remains low. So, what does this mean for you? As a buyer in a seller’s market, you’ll need to move quickly and strategically to score your dream home. To help you through the process, we’ve put together 6 tips to navigate the current market.
First-time Homebuyer Tips to Navigate the Current Housing Market:
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Create a wishlist and a need list:
When searching for the perfect home, it’s a smart idea to first determine what you want and what you need in a home. Once these lists are complete, consolidate and prioritize the things you need while also considering what you can afford. This step will help with budgeting and will help motivate you to start saving for the things you want down the road, such as a kitchen or bathroom remodel.
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Get pre-approved:
Even before you start searching for homes, your first step should be to get pre-approved by a mortgage lender to learn how much they are willing to lend you. This will give you a better idea of how much house you can afford so you can confidently shop in your price range. If you meet the minimum criteria, you will receive a pre-approval letter to use during your home search to show real estate agents and sellers that you are a serious buyer.
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Be aggressive:
Things move at top speeds in a seller’s market. Affordable, single-family homes often enter bidding wars and sell within days of entering the market. As a first-time home buyer, you need to be aggressive in the current market so you don’t miss out on the home of your dreams. Once you know exactly what your maximum price is from your pre-approval, be sure to offer that from the get-go to beat out as much competition as you can.
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Hire a good real estate agent:
Hiring a real estate agent that knows the ins and outs of the market and the area you’re interested in purchasing is invaluable in a seller’s market. If you’re using Zillow, Trulia, or a similar listing tool, those homes are likely already spoken for; an agent will have a better idea of what homes are available, and which ones are in your price range. Another way you can stay on top in a seller’s market is to ask your agent for listing notifications to make sure you receive an email whenever a new listing or price reduction matching your buying criteria is posted to the MLS.
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Write a personal letter:
When you know you’ll be competing with multiple offers on a home, it’s a smart idea to send a personal letter to the seller when sending your offer. This will help make the sale more personal and will give the seller something more to consider than just price when making the decision of who to sell to.
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Watch your timing:
If you’re a renter and decide to purchase a home midway through your lease, it’s important to be mindful of the timing in finding a home, obtaining financing, and closing so you’re not paying for your mortgage on top of your rent payments. Be sure you understand the home buying and mortgage approval process before you begin the search for your dream home.
Now that you have a better understanding of the current housing market in Dane County and have some tips under your belt, are you ready to start your path to home ownership? Reach out to us today to get pre-approved, or start by applying online with our 2-step online application!