DANE COUNTY MARKET
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Here in Dane County, the spring market is back with a vengeance.
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The spring market is back with a vengeance. After a full year of dealing with COVID-19 here in the U.S., a vaccine surge is on the horizon, and the economic outlook is positive. March, a historically active month for the market, is once again poised for strong performance.
Home prices continue to surge despite a slight dip in demand. The recently released S&P CoreLogic Case-Shiller 20-city price index shows that home prices have been increasing at the fastest rate since 2014. Of the 20 cities surveyed, Phoenix, Seattle, and San Diego led the pack. In Dane County, median home prices rose 15.5% in February year over year.
It was also reported at the end of February that total mortgage application volume fell by 11.4%. That’s largely due to interest rates climbing back up into the high 2s and low 3s. While it’s clear that 2021 won’t be a second consecutive year of watching rates limbo to new lows on an almost monthly basis, the Fed still intends to keep rates artificially low. Furthermore, millennials—the largest generation in American history—will continue to pour into the market after helping Zillow’s traffic skyrocket to 9.6 billion visits last year.
What can thaw our market? An uptick in inventory would certainly do the trick. An intensified seller’s market emerged in the wake of the pandemic. It has led to homes in some markets fetching a jaw-dropping number of bids before going under contract for tens of thousands of dollars over list price.
However, it also hampered sales a bit. “Pending home sales fell in January because there are simply not enough homes to match the demand on the market,” said Lawrence Yun, chief economist for the National Association of Realtors. With more sellers primed to enter the market, weary homebuyers may find a smidgen of relief—but they still won’t be calling the shots. (Offers over list price will still be par for the course).
Home prices have been increasing at the fastest rate since 2014.
Would-be sellers who sidelined their plans last spring due to COVID-19 may feel more optimistic this year. They’ve watched the 2020 housing market triumph in the face of adversity, and they’re seeing consumer confidence rise.
More inventory this spring could grease the wheels of the housing market and lead to huge increases in sales. What does this mean for you? Though some buyers may be deterred by interest rates ratcheting up a bit, many more are rushing to lock in affordable monthly payments while they still can.
For sellers, the competition will increase markedly over the next few months. Netting top dollar is still more than possible, but overpricing a home and failing to prepare it for the market are losing strategies. Buyers and sellers alike need to work with a skilled professional to navigate this March market madness.
If you’ve even been entertaining the idea of selling your home at all this year, I invite you to use my home valuation link to see what your property is worth. If you want an even more accurate picture of what your home could sell for, reach out to me personally. I’m talking to both buyers and sellers around Dane County every day, and I can help you make the right decision for whatever you decide to do.
I’m discussing how coronavirus has affected the stock market and the real estate market.
Want to sell your home? Get a FREE home value report.
Want to buy a home? Search all homes for sale.
Check out the new app now!
What’s going on in our Madison real estate market, and how has it been affected by the issues both nationally and abroad?
Certainly, one of the biggest affairs happening right now is the coronavirus pandemic. I’m not a physician; I can’t give you the best recommendations on how to protect yourself from the virus, but I can provide sources. Centers for Disease Control (which updates five days a week at noon) and World Health Organization are two of the best sites to check out if you want more information about coronavirus. There is a ton of noise out there about this pandemic, so please check these trusted sources before you believe rumors going around.
What does coronavirus have to do with the real estate market? According to Freddie Mac, in late February and early March mortgage applications were up 10% from where they were a year ago. The virus has caused a huge panic in the stock market, the market has had major drops and recoveries recently, back and forth. At 1:40 in the video above you can view a graph that shows what the stock market did during the past five major health outbreaks, including Zika and Ebola.
Looking back, the market fully recovered and then some. The market reacting to health crises is routine.
At 2:25 in the video above you can see what happens to interest rates over the years, starting in 1972. For almost 50 years the 30-year mortgage rate has moved in unison with the 10-year treasury rate. Interest rates are dropping, so this may be a great time to refinance or purchase a home and have the lowest rate in recorded history, which was reported this past week. Locally, the rate is at 3.25% for a 30-year fixed mortgage right now.“
The market reacting to health crises is routine.
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What’s happening locally? Dane County has a current inventory level of 1.43 months. Six months of inventory means a balanced market, where neither sellers nor buyers have the upper hand. So we’re currently in a severe seller’s market with inventory this low. Almost half of the current active inventory is under contract. Madison is at one month of supply, and the surrounding communities vary between one month and just over two months.
The market’s moving quickly; there’s more demand than there are houses. This should continue to push property values up.
If you want more details about a specific Madison area community you can follow this link. Here you can see the average sale price, inventory, what type of market it is, and more. If you want more detailed information on any of the communities listed, please contact me, I can provide you with that data.
If you have any questions or are considering buying or selling, reach out to us. We’re here to help.
