Madison, Wisconsin, is in the heart of America’s Dairyland. But this is a bustling city that is more than the cheese. The city is known for its welcoming atmosphere and commitment to social equity. That makes the Madison real estate market one of the most active in the country.
You don’t have to drive far from the center of Madison to find yourself on the shores of Lake Mendota or Lake Monona, where you can indulge in all those fun summer water activities and some chilling winter ice fishing. Back in the city, you can enjoy a night at the Madison Symphony Orchestra or explore one of the many farm-to-table restaurants.
Those are just a few of the many amenities that the Madison housing market has to offer its residents. It is also where you’ll find a current median home price in Madison at $364,978. That is according to the online real estate search engine Rocket Homes. The number represents a $109,666 or 43% increase over the Madison home prices from last year.
Forecast for the Future
What does that increase in the median sale price mean for the Madison real estate forecast? According to the online investment site Walletinvestor, the trends indicate that Madison home prices will keep going up. They find that the sale prices in Madison will increase by 16% over the next 10 years.
Homebuyers on the Search
According to the U.S. Census Bureau, the current population of Madison is 272,903, but that number is poised for change. The census data site World Population Review tags Madison as the fastest-growing municipality in Wisconsin, with a population growth rate of 3%. That translates into a lot of folks moving into Madison and looking for a place to call home.
Those potential homebuyers are all looking for the same things, such as great schools, friendly neighborhoods, and spacious homes where their families will grow and thrive. The houses are out there, but they might not be for long.
Current Madison Real Estate Market
Rocket Homes found that in July, the number of homes for sale in Madison was 732. In August, that number dropped 12.8% to 638 homes. The number of homes sold in Madison in July was 274, and 221 in August.
To understand the intricacies of the Madison real estate market, you have to look closer at the numbers from the August sales. Consider these housing facts from Rocket Homes:
- 52 homes were sold under the asking price
- 29 homes were sold at asking
- 140 homes were sold over the asking
If you’re entering the Madison housing market, you might be paying above the asking price for your dream home.
Following the Madison Real Estate Trends
What makes Madison so attractive to prospective homebuyers? If you follow the money, you’ll find that Madison’s economy has much to offer its citizens, starting with the opportunity to work. According to the U.S. Bureau of Labor Statistics, Madison’s unemployment rate is 2.5%, which is below the national rate of 3.8%.
If you’re moving from California, you only need a salary of around $34K to maintain your current standard of living. Data site PayScale finds that Madison’s living cost is 31% lower than in California. The cost of housing is 58% lower. A good job will take you far in Madison.
A Seller’s Market
By all accounts, Madison is in the midst of a “seller’s market.” It has been that way since last year. As the name implies, a seller’s market is a real estate market condition that is more advantageous to sellers than buyers. That puts sellers in the proverbial driver’s seat where they can control the asking price for their home.
Here are the factors that contribute to creating a seller’s market:
Low Inventory – The low inventory in Madison real estate means more buyers are looking for homes than available properties.
High Demand – Madison’s growing economy and ideal living environment make it desirable to invest in a home. That creates a strong demand in the Madison real estate market.
Faster Sales – In a seller’s market, homes don’t keep up the “For Sale” sign for long. According to the online real estate search engine Redfin, the median days on the market for a Madison home is 37 days.
Higher Prices – When there is a high demand for homes and a low inventory supply, prices increase. That is true in Madison, where most homes sell above their listing price.
What does this mean for the average homebuyer? It means they have limited negotiating powers. When buyers are willing to pay above the asking price, you must quickly match or go beyond that price.
It might also mean waiving contingencies and inspections. But that could be risky. You don’t want to experience buyer’s remorse with your first home.
Tips for Home Buyers in Madison
How can you come out on top as a buyer in a seller’s market? Start with getting pre-approved for a mortgage. That demonstrates to the property owners that you’re a qualified buyer without any financial obstacles that would prevent closing on the home.
Working with an experienced real estate agent who knows the local market is also vital. That is someone who will have the inside track of which homes are coming onto the market and what is a fair price. An experienced agent will also be a strong advocate for your home-buying goals.
Although Madison is known for its tranquil way of life, the seller’s market can create a bit of a buying frenzy. That means you need to be decisive with your decisions. It could mean leaving an open house and going directly to your real estate agent to put in an offer.
You will also need to be open to compromise. Everyone has a version of a dream home, but the reality of homes on the market rarely matches up 100% with those dreams. You might find a great home in a great neighborhood at the right price that doesn’t have a finished basement or extra bathroom. Those can be fixed once you get the property.
Another way to stay competitive is to have an escalation clause in your offer. If another buyer comes in with a higher offer, your clause could automatically trigger a match price but keep you in the first position to buy the home.
Finally, you should consider writing a personal letter from your family to the homeowner. You want to let them know that if you move in, you’ll continue to care for the home as they have. Making a personal connection with the homeowner can put you over the finish line.
Making Madison Your Next Home
In a seller’s market, homebuyers face a highly competitive environment where properties move swiftly and often come with multiple offers. It will help your buying plans to go into the market with a mortgage pre-approval and an experienced real estate agent on your buying team.
When you find a property of interest, fast action is a must. Strive to make your offer as appealing as possible. Moreover, you can personalize your offer with a heartfelt letter to the seller and avoid overspending by adhering to your budget.
With home prices rising in Madison, this might be the best time to get into the market. A seller’s market does not automatically lock you out of contention for your next or first-family home. Madison is waiting.
