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Madison Real Estate Market Tightens Amid Pandemic

Updated: Jun 13, 2022

It remains a hot sellers' market and even more so during the COVID-19 epidemic for some parts of Madison.

I want to focus on single-family houses in Orchard Ridge and several nearby neighborhoods. The average price of homes continues to increase as shown in Chart 1. The average price of a house in the “Middle West” and “South West” sides (as it did in most of Madison) continued to increase through June 2020. In 2009 the average price of house on the Middle West side was almost 30% more than the average on the South West Side. As of June 2020, that premium is 46%, down from a 56% premium in 2015.

The reasons for the steady increase in single-family house prices are straight forward. We live in a mature neighborhood where the supply of houses is more-or-less fixed. At the same time, people with higher incomes, often working at Epic and other high-tech companies, continue to move to the Madison area and fall in love with Orchard Ridge and other West Side neighborhoods.

One factor driving price increases this spring has been the COVID-19 epidemic. Many potential sellers chose to delay listing their houses in March and April. As shown in the second chart (see the next page), more houses were listed for sale in March 2020 than any of the previous three years. The COVID-19 lockdown, beginning in mid-March, reduced new listings in April by a third to a half of what one might have expected in the area. The effect on prices of COVID-19, shown in the following chart, seems clear: the average sold price of a home on the Middle West and South West sides of the city jumped to a record of almost $400,000 for June 2020.

If you moved to Orchard Ridge, and the South West Side in general, in the last two or three years you know how fast houses have been selling. The last chart (see the next page) shows how slow the market was in 2010, the bottom of the popped housing bubble. Houses in our part of town took 126 days to sell, on average. North of the Beltline, houses in the Middle West Side were selling in an average of just 82 days. That situation has dramatically reversed in the last ten years. In June 2020, houses on the South West Side took, on average, just 25 days to sell. Across the Beltline it took 33 days, on average.◼

Mike Thomsen is a licensed Realtor with Stark Realtors and President of the Orchard Ridge Neighborhood Association.

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