Dane County Housing Market Update - January 2022

Dane County Market Update - January 2022

Last year, the real estate market got a little bit out of hand. We were seeing $50,000, $60,000, $100,000 over asking price. Buyers were buying without appraisal or inspection contingencies, and it was nearly impossible for someone to purchase a home if they had a home sale contingency. So what does that mean for today, and what does 2022 have in store for us?

Quite frankly, many of us are expecting much of the same for 2022 - a severe lack of inventory, historically low interest rates, and high buyer demand are all going to form a perfect storm that fit together to create high levels of competition and rising prices.

Let's take a quick look at where we've been so we can better understand where we're going and how that affects you in the 2022 real estate market.

Through November, Dane County almost set a record for homes sold: just over 8,100. That's nearly double where we were 10 years ago. It's quite likely that we're going to see that 2021 set a record for annual number of sales.

Likewise, median sales prices also set new records in 2021. We hit $365,000 for the median sales price in June and rates remained low. At the end of the year, interest rates were typically 3% to 3.25%.

Finally, 2021 gave us the fewest number of listings we've seen in Dane County since the MLS started keeping track in the late nineties. This means we failed to keep up with demand by replacing the houses that went off the market.

What does this mean moving forward? Should you sit the year out? Not exactly. In fact, I shared, in another recent post, the dangers of sitting this year out and waiting for a more buyer friendly market before you purchase your home. In short, waiting to buy is likely going to cost you thousands of dollars due to rising prices and increasing interest rates. It might be best to dig in your heels and make something happen so that you can get the most house for your money.

If you are planning to purchase a house this year, it is absolutely essential that you connect with a realtor and a mortgage lender as soon as possible. Realtors will help you stay on top of new properties hitting the market much faster than your own online search on Zillow or Realtor.com, and we can advise you on the best strategies for you to use to put together a winning offer. Meanwhile, your mortgage professional should be a local lender with a strong reputation among local realtors. They will help you work to create your financing options and get you pre-approved so you know exactly what your budget is.

In a competitive market, the reputation of your realtor and mortgage lender could be the difference between you getting that dream home you've fallen in love with or losing out to other offers. Choose wisely.

Sellers, do not rely on the market to do the work for you. The best offers will come in on the best houses with the most exposure. Sellers that really want to capitalize on this market need to take all the steps necessary to make their house shine - make sure you work with a realtor that's going to maximize your exposure with their marketing so you can reach the highest number of potential buyers possible.

Sellers, beware. The lowest cost or the biggest promises are not a good reason to work with a realtor. Make sure you hire an agent that can fully support any price that they promise you and make them show you exactly how they're going to use their marketing package to meet the highest number of buyers they can.

If you have any questions about your unique situation, give us a call. We are always happy to talk.