Market Update

As we close the books on another year, let’s review what 2024 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. As the data below shows, we had some slow growth in both sales and new listings in 2024. There continues to be extremely low inventory which causes the sales price to increase and since interest rates are staying in the 6-7% range, this has created a slow down both with the numbers of buyers and with the number of sellers.

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 an interest rate around 3%, making the sellers decide to stay put in their current houses. For those considering either downsizing or moving into a larger home, affordability has also become a real challenge.

What is the prediction for 2025? The year has started off slowly with interest rates staying higher than expected and political changes in the air.

As we move closer to the spring, we will likely continue to see competition in the marketplace with “move in ready” homes in desirable areas, 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.