As I celebrated 7 years as a Realtor this week, I thought to myself... how did we get here? I try and keep my communications as upbeat and professional as possible, but there is no other way to describe this current market other than with a head scratch and a profanity or two.
I decided to get a little nerdy and pull some stats. As you can see below, the market has gotten pretty crazy since I started in Real Estate in 2015:
In Dane county, the average yearly sales growth has gone up roughly 1% year over year. When looking at 2014 vs 2015 median sold price, prices went up roughly 4%. The following year prices went up to roughly 5% growth 2015 vs 2016, then up roughly 6% and so on. HOWEVER! from 2020 to 2021 we jumped up to 11% growth!!!!
It's too early to tell how 2022 will shake out, but as of March 20th, 821 homes have closed and the median sold price is $392,286. I feel confident we will hit a median sold price of $400K this year in Dane County.
"Ok, so what does it take to buy a house in this competitive market?"
Great question! First, we need to throw the rule book out the window. There are buyers in this market that are ready, willing and able to do WHATEVER it takes to buy a house. If you are looking at a home in or near Dane County, prepare for most of your competition to waive their inspection and appraisal contingencies. About12% of offers so far this year were "cash" compared to 7% cash offers in 2015.
Why am I using "cash" in "quotes"? Because, there are lenders now fully underwriting your loan upfront or offering to take on the risk to allow you to waive your financing and turn the deal into a "cash" deal, even though you may not be paying with a briefcase full of $100 bills.
Let's circle back to the inspection and appraisal contingencies. While it sounds crazy that people are buying houses without having it inspected and are offering to pay $20-$50K over the appraised value if the appraisal comes back low.... it's happening. Often. Like... on most houses in Dane County. So don't shoot the messenger (me).
Bottom line? Patience and perseverance are what you will need in this market. Here are a few other things to keep in mind this year and beyond:
Prices will keep going up as demand remains high. Even with a rise in interest rates, we are not yet seeing a slow down in buyer demand. So, the longer you wait the more you are going to pay for your mortgage payment
If you are not comfortable with waiving contingencies or being incredibly lenient with them, you will need to look beyond Dane County, and you need to be prepared to settle for a home that might not be exactly what you pictured. Homes that have been on the market longer than normal are what you need to be targeting, because those sellers are more likely to accept an offer with a few contingencies versus a seller of a picture perfect home who has 20+ other offers to choose from
Lastly, the small things matter. When your offer is comparable to another offer, it can come down to simple things, like allowing the seller to rent back for free, working with a lender that is well known and well respected, and delivering the cleanest offer possible
I don't make the rules, people. I just try my darnedest to help you get a home
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