As we close the books on another year, let’s review what 2023 looked like from the real estate perspective. From a local housing perspective, buyer demand continues to be very high in Dane County and inventory continues to be very low. Given the supply restraints over the past decade, with new construction growth being very slow, there has been extreme pressure on existing home sales. The combination of extremely low inventory causing sales price to increase and interest rates in the 7% range has created a stalemate and overall slowdown in the real estate market. In fact, sales in Dane County were at the lowest level in over 10yrs.

Why is this happening? Although buyer demand is high and Madison continues to be ranked as a top national destination to live and the top city in the nation for hiring Generation Z workers; affordability is a real challenge for new home buyers given the combination of high prices and high interest rates. At the same time, those who own a home are sitting on a lot of equity and interest rates around 3%, making their motivation to move very low. For those considering either downsizing or moving into a larger home, affordability has also become a real challenge.

What is the prediction for 2024? Hopefully a little more movement! Interest rates are finally coming down slightly and economists predict small decreases throughout the year. As we start the year, there is still competition in the marketplace with “move in ready” homes in desirable areas receiving multiple offers, leaving the need for buyers to write strong offers. Although sellers still have the upper hand, they will need to work a bit hard to create a clean and updated house that is listed at a fair market value price.

A look at the past 5 years in Dane County (single family homes and condos, sourced from the MLS)