A Market Update From the Desk of Tom Hotter

You’ve probably heard that interest rates continue to hover around all-time low levels. Lower rates can provide buyers the potential of increased buying power for that dream home. They can also provide current homeowners an opportunity to refinance existing mortgages, enabling access to extra funds for remodeling, debt consolidation, college tuition, or whatever happens to be at the top of the list. But how have these historically low interest rates affected our local market here in Dane County?

According to the Realtors Association of South Central Wisconsin, the number of single-family homes and condos sold in Dane County was 820 units for August 2019. This was the seventh time the monthly total exceeded 800, however, this was a 7.3% decrease from last August. Overall, year-to-date sales for 2019 are down 3.9% compared to 2018 totals. Even though interest rates remain low, total sales in our local market have declined.

WHAT DOES THIS MEAN FOR BUYERS…

From the buyer’s perspective, inventory continues to be one of the main challenges in Dane County, particularly for those seeking properties valued under $349,000. Current inventory for properties between $200,000-$349,000 is 1.6 months, while the inventory for properties valued under $200,000 is just 1.3 months. Buyers can often be faced with a “multiple offer” situation in this type of market, making competition for that dream home fierce.

HOW DOES THIS IMPACT HOMEOWNERS…

Conversely, sellers benefit from this type of situation. The good news for local homeowners is that prices continue to rise, providing net equity gains through overall market appreciation. Dane County saw median prices in August 2019 rise 6.8% over prior year. The year-to-date median sale price is also up from $280,000 in 2018 to $295,000 for 2019, a 5.4% increase.

WHAT’S THE BOTTOM LINE…

How can sellers and buyers alike enjoy the projected Dane County real estate appreciation wave? For current homeowners, this is a good time to keep properties well-maintained and also to consider home improvements. Even though we’re experiencing a seller’s market, it is still a good idea to present a property in it’s best condition to receive top-value offers. Homeowners should consider a mortgage refinance to help achieve these goals. And, while sellers may have the upper hand in realizing market value gains, first-time home buyers should still consider entering the market but may need creative ways to qualify accordingly. Seeking consultation with a home loan professional will often result in uncovering a means to the end goal of homeownership, whether through a low down payment option or through one of the many home loan vehicles available today. Then, with a pre-approval in hand and working closely with a trusted real estate expert, that dream of homeownership can soon become a reality.

Tom Hotter
Mortgage Loan Officer – NMLS #1840776
608-720-9310
thotter@thompsonkane.com – tomhotter.thompsonkane.com