Madison WI Real Estate Blog

Facing Limited Inventory, More Buyers Turn to New Construction

Market conditions in Dane County make new construction an attractive option.

Building a new home is a lifelong dream for most people, and current real estate market conditions in Dane County have made it a great time to take that step.

February ended with 20% fewer active listings in Dane County than in the previous year. That means buyers face fewer options and higher prices for pre-owned homes, the South Central Wisconsin MLS reports

That situation has made new construction an attractive, economical option for buyers who are unable to find a pre-home that meets all of their needs. Josh Lavik, a realtor with Keller Williams and the principal at Josh Lavik & Associates, recently saw that play out with one of his clients.

“For nearly the same price as a pre-owned home, my client was able to make his own selections and build new,” Josh Lavik said.

That trend has played out across the country, too. The rate of new home starts was 18.7% higher in January than in the previous year, the U.S. Department of Housing and Urban Development reports

Still, even when market conditions make new construction a great option, many think the process is too complex or intimidating for them. Amy Kirner, a new home specialist at Veridan Homes, works to dispel that myth.

“Buying a new home has always been an option, but the stereotypical myth is that building or buying a new home is difficult, or loans are hard to acquire, or they cost more, or you don’t close on time,” Amy Kirner said. “But many are finding...

This Month in Real Estate - February 2015

The median sale price for homes, and the number of homes sold, were both up in February.

By Aaron Martin
Josh Lavik & Associates

The real estate market in the Madison area continues to heat up as winter turns to spring.

Demand from homebuyers is high, and inventory remains low. That created a great market for home sellers in Dane County in February. The number of homes sold, and the median sale price, both continued to trend upward.

The median sale price for homes across Dane County hit a record high for the month of February. It settled at $216,250, a 9% increase over the same period last year, the South Central Wisconsin MLS reported

Motivated buyers and limited inventory could continue to drive higher sale prices in the months ahead.

“Based on numerous conversations with my clients, there seems to be a sense of urgency in the market to buy a home before the interest rates start to rise,” said Josh Lavik, a realtor with Keller Williams and the principal at Josh Lavik & Associates. “Nearly all mortgage lenders that I talk to are expecting interest rates to rise this year, they just don't know when. This is definitely making a market where home sellers’ have an advantage, often with multiple offers to choose from.”

Higher sale prices didn’t turn those motivated homebuyers away last month, either. The number of homes sold in Dane County reached a seven-year high for February. There were 346 home sales reported, up 5.5% from the year-over amount.

Overall economic conditions help explain homebuyers’ willingness to pay higher prices for homes. At the end of 2014, the U.S. unemployment rate was at its lowest level since...

Deciding When the Time is Right to Upsize Your Home

By Aaron Martin
Josh Lavik & Associates

It’s usually pretty clear when a family has outgrown their home. There may be telltale signs like a line to use the shower in the morning, an office space crammed into the corner of a bedroom, or arguments about what to watch on TV.

But it’s not as easy to decide when the time is right to upsize your home. First, you have to consider the needs of your family, both now and in the future. Then you have to monitor market conditions to ensure that you can afford everything your family needs in a new home, and to make sure you can get a good sale price on your current home.

In the 1960s, the median home size in the U.S. was 1,500 square feet. Today, the median size of homes has grown to 2,200 square feet, the American Housing Survey reports. The transition to larger homes reflects changes in family dynamics, work-home life balance, and other changing lifestyle patterns over the last 50 years. Simply put, smaller homes built in decades past may not fit the needs of today’s growing families.

What do larger homes offer that smaller homes may not? The most common amenities found in today’s larger homes include offices, laundry rooms, standalone dining rooms, large master bedrooms, multiple bathrooms and multiple living rooms, the National Association of Home Builders reports (http://www.nahb.org/). Those amenities can make a big difference, too. For example, nearly 25% of adults report that they do some or all of their work at home, and a dedicated home office can help boost productivity. Multiple rooms for dining and entertainment make it easier to host family and friends. Laundry rooms and walk-in food pantries make everyday tasks more convenient. So, purchasing a larger home has plenty of benefits — but there...