2019 Sales for Dane County in the Top Three All-Time and Climate Migration

Monthly Market Update:  Housing Statistics for Dane County for December 2018

The year ended with sales up over 2017 in November and then down slightly compared to 2017 in December, but overall on a positive note with the third highest ever number of sales in Dane County at 8002 (behind 2016 with 8085 and 2017 with 8079).  The inventory dropped in a seasonally appropriate way, and less drastically than in 2017, slipping to 1.63 months of inventory in December whereas 2017 was at 1.47 month (a balanced market is considered to be 6 months of inventory when you take the average rate of sales per month and divide that into the number of available listings).

The continuing story is the steadily rising prices with the year end median sales price climbing to $278,000 over $264,000 from 2017, a 5.3% increase.  The interest rates slipped for the second month in a row, down from 4.9% to 4.63% in November and 4.45% by the early part of January.

There are a lot of unknowns with the economy right now, and as I write this the partial Federal shutdown drags on.  What types of effects and the severity of the effects remain to be seen.  Forecasts about an impending slow down have been tempered recently and there are indication that any recession may be delayed until as late as next year and it is predicted to be mild.  The inventory will almost certainly continue to be tight in 2019; buyer demand is expected to continue to be strong; but with forecasts of slowly rising interest rates the rise in home prices may remain moderate.

Summary of the data for the month of December 2018:

  • Number of sales of single family homes: 443 (492 in 2017)
  • Number of new listings: 318 (313 in 2017)
  • Total listings available end of October: 1084 (991 in 2017)
  • Number of months inventory available: 63 mos. (1.47 mos. in 2017)
  • Interest rates approximately 4.45%
  • Median price of single family homes and condos YTD sales: $278,000 ($264,000 in 2017)

Climate Migration

Recently I heard a rather interesting interview the main point of which I will share with you.  It was an interview with Professor Jesse Keenan, from Harvard University, an expert in the budding field of climate adaptation.  Climate Adaptation is a fancy way of describing how we will prepare for and cope with climate change.  Some examples of climate adaptation are improving sea walls and raising structures to deal with sea level rise, or changing building codes to cope with hurricanes or wildfires.  One of the more straight-forward kinds of climate adaptation is called climate migration, or once again put simply, moving out of an area because of the effects of climate change.

Here is where things get interesting.  Professor Keenan points out that two of the least affected regions of the country, and therefore two of the regions most appealing to people who are migrating due to climate are the Pacific Northwest and the Great Lakes Region, which could fairly be said to  include Dane County.  It impossible to get any accurate numbers on specifically how many people might move to our area.  But we can get some general notions about the overall scope of the situation. There are estimates that some 13 million people could end up migrating due to climate change by the end of the century.  Shorter term estimates are harder to come by.

I wanted to put this in some perspective so I turned to Madison’s Comprehensive Plan and saw that they forecast an increase in Madison’s population by some 70,000 in the next twenty years.  One of the many reasons that explains the city’s recent rise in popularity is the rapid growth in the technology sector.  It is important to note, however, that the methodology used to forecast the growth over the next twenty years did not consider any effects from climate migration.  We’re already experiencing some of the effects of rapid growth, with an increase in population of around 50,000 over the last twenty years.  These effects can be seen in tight housing and rental inventory,  increasing housing costs, and a growing need for infrastructure repair and expansion.  Consequently, if we receive any significant amount of climate migration it is likely to create very noticeable demands in all these areas, especially housing.

I’m not bringing this up to alarm anyone, but rather to point out that one of the potential benefits of population growth in our area is that anyone purchasing property in the next few years and of course current property owners will likely see the value of their investment continue to rise for the foreseeable future.  We’re living in interesting and perhaps challenging times, and there may be big changes in store for us.  I see it as part of my role to highlight the interplay between these current events and the real estate market.  As always, I invite your comments.

October 2018 Sales Data for Dane County and Cost vs. Value

Monthly Market Update:  Housing Statistics for Dane County for October 2018

Sales continued to be strong in October with only modest increases in inventory.  Despite the tendency to have steadily decreasing sales as we get farther into fall, there was a record-setting 633 sales for October, driven in large part by an increase in condo sales.  The inventory rose modestly, up to 2.2 months of inventory versus 2 months in 2017 (a balanced market is considered to be 6 months of inventory when you take the average rate of sales per month and divide that into the number of available listings).

It is not surprising, with the continued buyer demand and limited inventory, that the year-to-date median price rose again to $278,000, up from $265,000 for the same period last year.  However, there may be some pressure on this in 2019 if the interest rates continue to rise.  They are up to 4.9% compared to 3.9% for Oct. 2017.

The economy continues to roll along with record low unemployment numbers, increased job creation, and rising wages.  Signs are favorable for a good start to 2019, with the inventory continuing to be tight in all likelihood.  One note of caution is that the rising interest rates could take some buyers out of the market, especially if they are on limited budgets.

Summary of the data for the month of October 2018:

  • Number of sales of single family homes: 633 (608 in 2017)
  • Number of new listings: 677 (594 in 2017)
  • Total listings available end of October: 1450 (1345 in 2017)
  • Number of months inventory available: 2 mos. (2 mos. in 2017)
  • Interest rates up to approximately 4.9% (up from 3.9% in 2017)
  • Median price of single family homes and condos YTD sales: $278,000 ($265,000 in 2017)

Remodeling—Cost vs. Value

Every year Remodeling magazine does a survey of contractors and cross references with Realtors® to estimate the return on investment for the most common remodeling projects that people do.  The results of this survey can be very instructive when it comes to decisions about which projects make most sense when a sale might be in your future.  Here is a link to the Realtor.com article which talks about some of the overall conclusions and which includes a link to the Remodeling magazine article:  https://www.realtor.com/news/trends/top-renovations-to-boost-home-value/

But allow me to touch on some of the most important take-aways from the survey:

1) Large Renovations are not as Valuable as They Were

The return on investment for a large reno is down from 64% from a year ago to 56% in 2018.  Many Realtors® feel we are peaking on sales prices and thus the higher the cost of a renovation the closer to that price ceiling you get.

2) Changes to Tax Law are Affecting Remodeling Values

The new tax law which is in effect for this year has had a limiting effect on how many people will be able to deduct mortgage expenses and how much those people will be able to deduct on their taxes.  This in turn affects the value of a given project.

3) Material Prices are Up

Due to the unusual number of catastrophic events around the country, like floods, hurricanes, wild fires, and mud slides, there has been a rather large increase in the demand for building materials and for workers.  This has had the effect of driving up building costs all across the country.  You can’t expect to recoup the higher cost of the project especially since we are likely bumping up against the value ceiling already.

4) Curb Appeal is King

As they have pointed out to us in previous surveys, the best return on investment is with projects that improve curb appeal.  The number one project being a garage door replacement.  A close second is adding a manufactured stone veneer.

Each Scenario is Going to be Different

While the results of the survey are instructive and helpful, it is still important to consult with your Realtor® about your particular situation.  There can be specific circumstances about your home, your neighborhood, or about the market in general that would suggest a different approach.  Don’t hesitate to ask me if you want help evaluating the benefit of a project.

July and August Sales Data and Looking at Water or Flooding Issues

Monthly Market Update:  Housing Statistics for Dane County for July 2018

Once again, Dane County sales of houses and condominiums was strong in July, and only slightly behind July sales for 2017 still ahead of 2016 sales, the two best years for annual homes sales on record.  August saw another small dip in sales but nothing remarkable, as sales were barely behind the same month for 2017 and 2016.  The continued strong sales come despite historically low inventory and rising prices.  A balanced market is 6 months of inventory, and we were still below 2 months of inventory in July (1.9) and marginally above 2 months in August (2.1).  It is important to put this in perspective by considering that since the end of July in 2007 when the number of available homes was 5409, the inventory has dropped year over year to 1314 at the end of July in 2018 and it has only ticked up to 1395 by the end of August.

To understand the continued rise in sales price, we look at the most recent 12 months of sales.  As of the end of August the 12-month average median sales price for all of south central Wisconsin is up 5.8% to $274,980, not a surprising result considering the high demand and low supply.

Summary of the data for the month of July 2018:

  • Number of sales of single family homes: 900 (913 in 2017)
  • Number of new listings: 863 (944 in 2017)
  • Total listings available end of July: 1314 (1364 in 2017)
  • Number of months inventory available: 99 mos. (2.04 in 2017)
  • Interest rates up to approximately 4.59% (up from 4.54% in June and 3.9% in 2017)
  • Median price of single family homes and condos: $289,000 ($270,000 in July 2017)

Summary of the data for the month of August 2018:

  • Number of sales of single family homes: 864 (894 in 2017)
  • Number of new listings: 859 (907 in 2017)
  • Total listings available end of August: 1395 (1434 in 2017)
  • Number of months inventory available: 11 mos. (2.15 in 2017)
  • Interest rates up to approximately 4.6% (up from 4.59% in July and 3.75% in 2017)
  • Median price of single family homes and condos: $279,950 ($271,250 in August 2017)

Water, Water Everywhere…

With all the recent flooding in the Madison area and in the State of Wisconsin generally it seemed like a good time to take a look into the issue of extreme rain events and to examine how the potential for flooding might affect the average homeowner and not just those of us in a floodplain.

This is not a One-Time Thing

By now it is very well-established science that climate change is affecting our weather patterns across the globe in a variety of ways.  For this blog I want to focus specifically on the most immediate impact we are currently seeing in the Midwest.  The National Climate Assessment is a report on the science and effects of climate change with a focus on the United States as mandated by the Global Change Research Act of 1990.  In the most recent report it reveals that precipitation in the Plains, Midwest and Northeast is increasing, and that the heaviest rains are increasing in intensity and frequency (https://science2017.globalchange.gov/).  In other words, we might well expect to see more extreme rain events in our area for the foreseeable future.  (see also https://www.epa.gov/climate-indicators/weather-climate)

Floodplain or No Floodplain, It is Time to Reassess

Most of us assume that only people in floodplains need to worry about flooding and flood insurance.  However, during the most recent dramatic downpour, with some local areas receiving as much as 13 inches of rain in a 24 hour period, some areas that never had water problems before suddenly found themselves inundated by water that simply couldn’t drain away fast enough.

Lenders who are federally regulated or insured are mandated to require flood insurance for properties that are in certain flood zones as determined by the National Flood Insurance Program.  But that isn’t the end of the story as we are seeing more clearly that flooding isn’t just occurring in the typical areas near bodies of water.  In addition, consider the fact that homeowners insurance will not normally cover flood damage, including any water that comes into the house sideways through a wall or window or up through the floor.  This is true even if the flooding is caused by a misplaced downspout or a backup of the floor drain or sump.  And according to FEMA, more than 20% of flood damage claims come from properties outside the high risk flood zones.  (https://www.fema.gov/national-flood-insurance-program)

Evaluate Your Property for Water Handling

There are several things you should consider when choosing a house to buy or if you are already in a home of your own, when maintaining it. Here are just a few:

  1. Is it a low-lying area? Pay attention to the overall slope of the neighborhood and consider whether it is likely that water may potentially begin to pool near your home if an extremely heavy rainstorm hits.
  2. Are neighboring properties sending their water onto your property near the foundation? Where do your neighbors’ downspouts point and where do they discharge water from a sump pump?
  3. Is the grading around your home proper? The pitch needs to be away from the foundation to allow water to run off and around rather than collecting along your basement walls.
  4. Are the gutters protected from leaf litter? Are there trees overhanging the roof? Are there signs that the gutters are getting clogged and overflowing regularly?
  5. Are there signs in the basement that it has been a moist or damp environment? This extends beyond obvious water damage to more subtle signs of mildew, warping, staining, rusty nail heads in trim, paint on cement or block walls bubbling up and mustiness to name a few.

Drain Tile May be In Order

It is not always possible to keep water away from the foundation.  So especially when you intend to have finished space in a basement, it is a good precaution to have drain tile installed by a professional.  This may be a bit pricey, at around $1000 to $1500 per wall.  But there are a few advantages.  When the water finds its way to your foundation, it is given a way to run into the sump crock where it would be pumped out and thus save your carpets, drywall and furniture.  Most installers will offer a warranty against having water in the basement if the system is properly maintained.  You also would qualify for special coverage under your homeowners insurance in the event the system ever fails.

Consider Flood Insurance

Even if you aren’t in a floodplain where flood insurance is required, if you have reason to believe your property is at risk of flooding with the increasing extreme rains, you would be wise to consider obtaining flood insurance.  It is normally less expensive outside the high risk flood zones, averaging around $700 to $1000 per year.  It would also be worth considering the special coverage for back-up of sewer or sump (which would cover the sump pump failing or not being able to keep up with the water.)  So in essence the basement waterproofing system in combination with the special coverage can be a sort of alternate flood insurance.  Please consult with your insurance agent about what coverage is best for you.

Don’t Throw Up Your Hands

We all wish that climate change was not happening, but there is no point in simply wringing our hands and complaining about what befalls us.  There are things we can do to start to cope with what seems to be the new normal and to help ourselves weather the storms to come.

May and June 2018 Data and Selling in a Seller’s Market

Monthly Market Update:  Housing Statistics for Dane County for May and June 2018

Dane County sales of houses and condominiums slowed slightly for May and June, leaving us a little behind in overall sales year-to-date as compared with 2017.  It is likely that the continued low inventory is the main reason for the slackening sales.  The tight inventory has also continued to push prices up so that for the first half of the year the median price rose to $277,861 ($262,000 in 2017).  We ended the second quarter with another rise in inventory up to 1.81 months.  But after climbing over the first five months, peaking at 4.66% in May, rates dropped slightly to 4.52% over most of the remainder of the quarter.  Economic conditions continue to be good for the time being.

Summary of the data for the month of May 2018:

  • Number of sales of single family homes: 775 (857 in 2017)
  • Number of new listings: 1070 (1153 in 2017)
  • Total listings available end of May: 1032 (1186 in 2017)
  • Number of months inventory available: 54 mos. (1.79 in 2017)
  • Interest rates up to approximately 4.54% (3.9% in 2017)
  • Median price of single family homes and condos: $280,000 ($260,000 in May 2017)

Summary of the data for the month of June 2018:

  • Number of sales of single family homes: 1021 (1095 in 2017)
  • Number of new listings: 1013 (1150 in 2017)
  • Total listings available end of May: 1195 (1242 in 2017)
  • Number of months inventory available: 81 mos. (1.87 in 2017)
  • Interest rates up to approximately 4.53% (3.95% in 2017)
  • Median price of single family homes and condos: $289,000 ($269,450 in May 2017)

Seller’s Market, A “No-Brainer” for Sellers, Right?

Not so fast.  By now, everyone has heard how much of a “seller’s market” it is, especially in Dane County.  But sellers should not assume that just because the market is favorable to them that they can do no wrong.  There are still many pitfalls to avoid so as not to end up stalled on the market.  And with the lightening quick rate of sales, the risk of languishing on the market are even greater, as buyers are quicker to assume the worst about a house that doesn’t sell right out of the gate.

Pricing:

You are far more likely to over-price rather than under-price a home.  Pricing a house too high is one of the surest ways to lengthen the time on market and lower your ultimate sales price.  It is tempting to price your home based upon that ridiculously high price one of your neighbors sold their house for.  You need to resist that temptation.  Seek out the assistance of your Realtor® to find the most comparable sales, taking into account the size, features, level of finishes and updating, exact location, and timing of the sale.  If you price the house too high, you may squander that critical first week of marketing when the interest is at its peak.  Pricing it right raises the chances that competition among buyers will bring it up to its maximum value.

Prepping for Sale:

You can’t just throw your house on the market in any condition and think that buyers will scramble to buy it.  Buyers are not fighting over every house, and a having your house in disrepair or disorder is a great way to have it sit longer.  It is true now more than ever that buyers prefer houses that are move-in ready.  The closer you can get to move-in ready (without breaking the bank!), the more interested buyers you’ll have and the more likely you’ll have competition over your house.

Marketing:

Sure, there are stories of people planting a small “for sale” sign in the front yard and minutes later their house is sold.  That should not be an expectation, rather you should plan to market your listing fully.  To maximize the number of potential buyers it is important to reach out to the widest audience.  Having your Realtor® put your house on the MLS gets you the most important, broadest exposure you can ask for.  In addition, you should certainly have a quality yard sign and broad internet exposure.  The importance of high quality photos can’t be overstated either.  Cutting any of these corners can limit your buyer pool and lower your chances of a positive selling experience.

Contingencies and Negotiations:

Even when you have multiple offers in hand, it isn’t safe to assume you’re home free.  It is critical to have good advice about what contingencies are acceptable, how they can be modified to benefit you and how best to analyze multiple offers to pick the right one for you; and that won’t necessarily be the highest offer.  It can be worth a lot to get the right closing date, a financing contingency with more money down, appraisal based upon the list price, or an inspection that is drafted to limit the buyer’s ability to back out for small issues.  Remember, in an emotionally charged atmosphere of multiple competing offers, buyers may act rashly to beat out the competition only to fall victim to buyer’s remorse once their offer is accepted.  Having a deal fall through means going back on the market after that initial excitement has already died down.  And less buyer interest may lead to longer marketing time and lower offers.

In Summary:

Even in a strong seller’s market, it is well worth putting forth a complete and diligent effort the market and sell you home.  In fact, the rewards could be significantly greater than other times.

 

April 2018 Data and Tips on Buying in a Seller’s Market

Monthly Market Update:  Housing Statistics for Dane County for April 2018

Demand for housing continues to be strong while inventory continues to be tight.  Dane County sales through April 2018 trailed 2017 slighted, due possibly to the paucity of listings, but the rest of south central Wisconsin outpaced the April 2017 sales.  Nevertheless, Dane County is still ahead of 2017 for the first four months of sales at 2007 (for 2018) versus 1954 (for 2017) and the median price rose to $275,000 ($265,000 in 2017).  We ended the month with a slight rise in inventory and with gently rising interest rates there is a chance that trend will continue.  However, confidence in the economy and that this is a good time to buy and to sell continues.

Summary of the data for the month of April 2018:

  • Number of sales of single family homes: 655 (676 in 2017)
  • Number of new listings: 971 (980 in 2017)
  • Total listings available end of April: 961 (1070 in 2017)
  • Number of months inventory available: 42 mos. (1.61 in 2017)
  • Interest rates up to approximately 4.55% (4.05% in 2017)
  • Median price of single family homes and condos: $275,000 ($265,000 in April 2017)

 

Eight Tips on Buying in a Seller’s Market :

Although there has been a lot of coverage on the tight real estate market and stories are circulating about multiple offers on properties, buyers should not become unduly alarmed or despondent.  There are many strategies that you can employ to win out over your competition.  First of all, don’t just assume you have competition; there are still houses which won’t draw multiple offers.  When you do find yourself in competition, consider the following:

  1. Price: The most obvious way for buyers to compete is on price.  With homes in the $200,000 price range we have been seeing prices go over by as much as $10,000-$15,000 with some regularity, and in many instances even higher.  It is still important to know the comparable sales so you know if you are over-spending.
  2. Earnest money: Earnest money is typically about 1% of the offer.  By raising the earnest money you can show the seller that you are a serious, reliable, and well-qualified buyer and the seller will have this potential hedge against the risk that you will walk away from the deal.
  3. Closing date: Your agent should be in communication with the listing agent to find out what closing date the seller would like.  Offering the seller their preferred date, flexible dates, or the option of post-closing occupancy to accommodate the seller’s needs can help tip the scales.
  4. Financing contingency: Show the seller you are very likely to get the loan by raising the down payment you plan to make from 5% down to 10%, 15% or even 20% down payment, shortening the contingency deadline, bumping up the maximum interest rate, and providing a pre-approval letter which shows you can afford the price you are offering
  5. Appraisal contingency: Especially with offers above the asking price, there is always the risk of an appraisal coming in low.  You may consider offering some protection to the seller by limiting your options for voiding the contract if the appraisal is below the offer price.
  6. Inspection contingency: Sellers are often concerned about issues arising during inspection that will scuttle the deal.  In addition to giving the seller the right to cure defects in the offer, a buyer may also put in specific dollar amount thresholds for being able to object to defects.  It is always risky to make an offer with no inspection contingency, but in rare cases a buyer may even feel confident enough to take this risk in order to gain a competitive advantage.
  7. Other miscellaneous contingencies: Every contingency in an offer is another hurdle the seller would rather not have to clear.  There are several that a buyer may choose to leave out in order to sway the seller, provided the buyer understands the risks.  Some examples include: radon testing, mold testing, home warranties, closing cost credits, subdivision covenants, surveys, etc.
  8. Personal letter to the seller: Never underestimate the power of a personal letter from the buyer to the seller talking about the reasons you love the house and neighborhood.  The seller wants to know the new buyer will love the house as much as they did.

March 2018 Market Update

Monthly Market Update:  Housing Statistics for Dane County for March 2018

The first quarter of 2018 has ended the same way it started, with heavy buyer demand, strong sales, and decreasing inventory.  The first three months of the year had 1342 sales (compared to1324 for 2017) and the median price climbing to $265,000 ($249,500 in 2017).  There are clear signs that these trends will continue.  Confidence in the economy is quite high, with 68% of potential buyers feeling it is a good time to buy and 77% of homeowners feeling it is a good time to sell.

Summary of the data for the month of March 2018:

  • Number of sales of single family homes: 583 (576 in 2017)
  • Number of new listings: 986 (1027 in 2017)
  • Total listings available end of March: 849 (975 in 2017)
  • Number of months inventory available: 25 mos. (1.45 in 2017)
  • Interest rates up to approximately 4.44%
  • Median price of single family homes and condos: $272,000 ($259,450 in March 2017)

Beyond Salesmanship: Your Realtor® as a Long-term Resource

Recently, after giving a presentation to UW Madison Engineering students on the verge of graduating, I came to the realization that many people don’t appreciate how much a Realtor® can do for them and how early in the process they can be helpful.  I believe real estate is about more than marketing and persuasion; it is about providing a full range of high level real estate services to our clients.  Realtors® are real estate professionals who are members of the National Association of Realtors® and often their state and local Realtor® associations.  We are supported with resources, training, and market information from our association.  Moreover we are sworn to abide by a code of ethics which guides our conduct towards each other as well as towards our clients and members of the public.  This means that you should expect a great deal from your Realtor®:

  • Information on the market – The most obvious time you should be receiving market information from you Realtor® is when you are at the point of either buying or selling. A thoughtfully prepared market analysis and ongoing analysis of comparable sales is essential to understanding the values of property.  In addition, your Realtor® should be willing to provide market data while you are in the early stages of choosing neighborhoods that meet your needs as well as when you are considering your next move so you can begin planning.
  • Background data and resources – Don’t hesitate to call upon your Realtor® to help you find information about neighborhoods, schools, accommodations, recreation, parks, shopping and more. This information can be useful in early planning before purchase, enjoying your current home, and planning for sale.
  • Evaluating properties – Although Realtors® are not often experts in building or inspection, they do learn a lot about evaluating homes in terms of how well they may meet your needs, the general types of maintenance you might expect to experience, and how a property is likely to be perceived by a potential buyer. These are all critical elements of establishing a value both for you and for a future buyer.
  • Ideas for remodeling and resulting value – Any time you are considering a remodeling project you might touch base with your Realtor® to get another opinion about the potential for increasing your home’s value. They can also help you evaluate which types of remodeling may be most beneficial in your particular case.
  • Recommendations for other service providers – Realtors® establish many contacts with service providers from many fields over the years through personal experience and through clients and colleagues. It’s always a good idea to get a few names to check out, and your Realtor® should be happy to share a couple if they know of someone.

In conclusion, I want my clients, past, present and future, to reach out to me to access the assistance I can provide at all stages from planning to active searching or selling.  This is a win-win arrangement!

Madison Real Estate Market Tightens

Monthly Market Update:  Housing Statistics for Dane County for February 2018

February marked two all-time records broken since the South Central Wisconsin Multiple Listing Service starting keeping these records:  the number of sales for the first two months of the year is the highest (745) and the active inventory at the end of February is the lowest ever (768).  This has resulted quite understandably in a 7.8% increase in the 12-month median price in Dane County to $265,000.

Summary of the data for February 2018:

  • Number of sales of single family homes: 365 (363 in 2017)
  • Number of new listings: 682 (688 in 2017)
  • Total listings available end of January: 768 (989 in 2017)
  • Number of months inventory available: 13 mos. (1.47 in 2017, 2.10 in 2016)
  • Interest rates up to approximately 4.33%
  • Median price of single family homes and condos: $269,900 ($250,000 in February 2017)

Breakdown of sales data by Madison Metro Neighborhoods:

Madison Area 2018 Sales Currently

As of 2/22/2018

Available/Under Contract

 January February
Isthmus

(W01, E01)

27/17 #sold

Avg. price

Median price

10

$442,030

$357,650

15

$618,897

$414,255

Near east

(E02, E05, E09)

14/15 #sold

Avg. price

Median price

10

$302,611

$294,750

7

$335,641

$375,000

East

(E10, E11, E12, E13)

30/52 #sold

Avg. price

Median price

41

$257,682

$248,250

41

$237,672

$220,000

Monona

(E14, E15)

8/6 #sold

Avg. price

Median price

5

$487,480

$377,400

7

$292,128

$285,000

Northeast

(E03,E04,E06,E07,E08)

18/60 #sold

Avg. price

Median price

29

$221,103

$199,900

34

$204,590

$202,250

South

(W15,W16,W17,W18,E16)

11/8 #sold

Avg. price

Median price

12

$175,445

$164,975

8

$252,000

$218,500

Fitchburg

(W19)

69/61 #sold

Avg. price

Median price

17

$341,493

$312,000

19

$352,113

$295,000

Near west

(W11,W12,W13,W14,W02)

22/38 #sold

Avg. price

Median price

24

$305,208

$297,625

18

$394,069

$315,000

West

(W03,W05,W06,W07)

46/45 #sold

Avg. price

Median price

32

$318,756

$283,710

39

$330,760

$332,000

Southwest

(W08, W09, W10)

84/59 #sold

Avg. price

Median price

45

$277,059

$260,000

43

$270,488

$245,000

Middleton

(W04)

33/27 #sold

Avg. price

Median price

16

$305,029

$303,500

13

$386,769

$420,000

Next Up:

Beyond Salesmanship:  A Teaser

Last time I promised I would begin a series of articles discussing the important role your agent should play in your real estate transactions, highlighting the many valuable services available before, during and after closing a deal.  Responding to some of the feedback I have received, I decided to start alternating posts every two weeks, with the first blog being the market update and the second being a feature article.  So just as a teaser for my next post in two weeks, I’ll say you should rightly expect your agent to go way beyond salesmanship.  If you can’t pick their brain on a variety of topics like scouting areas for promising trends, providing information on attractions and accommodations, offering analysis of home values, giving advice on pros and cons of remodeling and resulting values, and sharing recommendations for contractors, lenders, inspectors and others.

Walker Real Estate Blog

February 22, 2018 – First Post

Monthly Market Update:  Housing Statistics for Dane County for January 2018

January saw a continuation of the two main themes of 2017 and 2016:  1) vigorous sales and 2) declining inventories.  The number of sales in January reached an all-time high for the month at 380 single family homes and condos.  This increase in sales largely accounts for the overall number of active listings (as of the end of January) dropping another 17% despite a 7.5% increase in the number of new listings.  Currently there is a housing inventory of 1.26 months compared to 1.52 in 2017 and 2.18 in 2016 (6 months of inventory is considered balanced between buyers and sellers.)  This further tightening of the market is leading to fierce competition over new listings across the board, but especially in the price ranges from $150,000 all the way up to $300,000.  Interest rates have begun to creep up, approximately .33% since the beginning of 2018, which may be inducing buyers to get out early to beat further increases.

Summary of the data for January 2018:

  • Number of sales of single family homes: 380 (339 in 2017)
  • Number of new listings: 562 (523 in 2017)
  • Total listings available end of January: 851 (1024 in 2017)
  • Number of months inventory available: 1.26 mos. (1.52 in 2017, 2.18 in 2016)
  • Interest rates up approximately .33% since start of 2018
  • Median price of single family homes and condos: $264,950 ($240,000 in January 2017)

Highlights from the Tax Cuts and Jobs Act – Effective starting 2018 taxes

  • NAR projects slower growth in home prices – estimating a decrease in average home price by 1-3%, largely due to declines in some areas from restrictions on deduction of mortgage interest and state and local taxes
  • Tax brackets Lowered – most notably 22% ($38,700-$82,500 single/$77,400-$165,000 married) and 24% ($82,500-$157,500 single/$165,000-$315,000 married), would have been roughly 25% and 28% with the prior law; above those brackets it varies
  • Exclusion of Gain on Sale of Principle Residence – requirement remains as it was: must have lived at residence 2 out of past 5 years to exclude the gain on sale of principle residence
  • Mortgage Interest Deduction – caps at $750,000 mortgage debt, grandfathers in mortgages existing on 12/14/17 up to $1,000,000; can refinance those existing as well, provided the mortgage amount does not increase
  • Interest on Home Equity Loans – only deductible if used to substantially improve the residence
  • State and Local Taxes – Property Tax and Local Income or Sales Tax deduction limited to $10,000; this will have greatest impact on higher tax areas/neighborhoods
  • Standard Deduction – doubled to $12,000 single and $24,000 for married filing joint; Congressional estimates say only 5-8% of filers will be able to claim their deduction by itemizing; NAR says this will greatly reduce the tax advantage of home ownership
  • Personal Exemptions – repealed; under prior law the filer got a personal exemption of $4150 for him/herself, and $4150 for spouse and for each child; for some families this will wipe away the benefit of the increased standard deduction.
  • Business Income Deduction – business income for sole proprietors, independent contractors, passthrough income for LLCs and partnerships will be taxed at a lower marginal rate and they may qualify for a 20% up front deduction from business income for their taxable income below $157,500 single/$315,000 married filing joint (phased out over those amounts)
  • Child Tax Credit – up from $1000 to $2000
  • Casualty Losses – now only deductible if the loss is from a presidentially declared disaster
  • Moving Expense Deduction – repealed (except for members of the Armed Forces)
  • Entertainment Expenses – repealed (except for meals for employees on work travel)
  • Several Provisions from Prior Law Retained – Mortgage Credit Certificates, Medical Expenses, Student Loan Interest, 1031 Like Kind Exchanges for real estate, Historic Tax Credit (with some modification), Carried Interest, Cost Recovery, Qualified Private Activity Bonds, Low Income Housing Tax Credit

Disclaimer:  This summary of some of the important provisions of the new tax law is not meant to be exhaustive nor is it meant as tax advice.  The source of the information is the NAR News Brief:  http://narfocus.com/billdatabase/clientfiles/172/19/3062.pdf.

Next Up:

Beyond Salesmanship:  What you should expect from your agent

I will begin a series of articles discussing the important role your agent should play in your real estate transactions, highlighting the many valuable services available before, during and after closing a deal.

Straight to the Heart

Thanks for joining me!

They say that home is where the heart is.  So when we talk about real estate, we really are getting straight to the heart of things.

Real estate is always evolving. The real estate market changes rapidly and the economy as well as the laws affecting the economy have substantial impacts on real estate and vice versa.  In a modest attempt to stay abreast of these factors and to make some sense out of the swirling mass of data and news, I intend to make regular postings with monthly market updates and timely analysis of the latest real estate happenings.

I’m always happy for feedback; please don’t hesitate to share your insights as well!