Dane County housing market is hot, but challenging for first-time buyers
MADISON, Wis. — The real estate market hasn’t been this hot in years in Dane County. As the area continues to be the fastest growing region in the state, with its abundance of jobs, state government, and the UW-Madison campus, affordable housing is in short supply.
“It’s a unique market for sure,” said Keller Williams agent Matt Heilman. “The Madison housing market I think will stay pretty strong, and as long as we’re low on listings and there’s not enough people selling, it’s going to be challenging for home buyers.”
That’s especially the case for first time home buyers, who often pursue houses in the $200,000-$300,000 price range. Such homes are so hard to find, Heilman says they often can end up in a bidding war in the current market.
“We just sold a recent listing, we got $12,000 over asking price the first day it was available,” said Heilman, a former Verona teacher who now spends his time educating home buyers about the intricacies of the real estate market in South Central Wisconsin. He said that in a market like the current one that exists in Dane County, first time buyers have to be prepared to make concessions if they want to stay on budget.
“Sometimes first time buyers want to move into that home that’s 8-12 years old with newer finishes,” he said. “But at $250,000 to $275,000 price point, they might have to settle for an older (less expensive) home. Maybe something built in 1954 that has smaller bedrooms and doesn’t have walk in closets.”
And other times, it takes a major change in your search radius. That was the case with Molly and Andy, two newlyweds who recently purchased their first home. Early in the process, they realized what a challenge it was, and that led them not only away from Madison, but out of Dane County entirely. Early on, they ran into battles with other first time battles, that ended in bidding wars.
“We had an area that we wanted to live in, but unfortunately there were some battles and we had to let some go,” said Molly, a nurse who works in Madison.
“It just seemed like a big waste of time,” Andy said. “There were always other people looking at the same house, and everyone’s going home unhappy except the one person who got the house.”
Eventually the couple was able to stay in their target price range, by expanding their search area to a community some 30 miles away from the Capitol Square. While they’re spending a little more in gas, they found a home that suits their finances, and their lifestyle.
Even then, they had to act quickly.
“The house was listed on a Thursday, and we saw it about 4 hours after it was listed,” Molly said. “We wrote an offer the next morning and it was accepted probably within six hours after that.”
Heilman said in this market he’s seen it all, from waiving contingencies like the all-important home inspection — which he never recommends — to sending love letters to sellers about how much a buyer loves the home, hoping that their offer will be accepted.
“It’s really a strong seller’s market, sellers can get really whatever they want.. buyers are struggling because there’s not enough home out there for buyers so they’re struggling more than they have in the past.”
In addition to expanding the search zone, Heilman says buyers have had some luck finding homes that have been on the market awhile longer. He also says condominiums, which once languished on the market for months in Dane County, have bounced back strong in 2017 for both for sellers and buyers. Heilman considers condos a very appealing option now for first time buyers.
Experts agree, first time buyers should keep in mind that home ownership is a lifelong commitment. Your first home very seldom, is your last home.
Instead of paying rent and paying someone else’s mortgage, buy that first home,” Heilman said. “Start building your own equity in your own home and then work up to that dream home.”
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