Ever wonder what the supply/demand schedule in Dane Count, Wisconsin looks like? No? Well... Either way, I'm taking a look into the trends and how those trends were impacted by the big COVID surprise of 2020.

Ok, so let's start with AVG Active Inventory Level for SF homes throughout the year.

Oh boy, COVID brought some obvious divergence from the 5-year trend. 2020 starts with the second-lowest Inventory Level of the past 5 years, but it quickly converged within the standard range. By the end of April, though, the extreme drop in INventory becomes obvious.

In previous years, October marked the top for Inventory. 2020 sees the top in April and then slowly slides down throughout the year.

Now... Let's see what was going on that caused such a drop in Active Inventory.

Some pretty obvious trends here. A normal year sees both supply and demand begin to rise sharply in early January, and then reach a peak in late May. This is followed by a sharp drop that lasts through the end of the year, where demand begins to eclipse supply.

Remember the V-shaped recovery that everyone talked about early in the pandemic? We can see that V clearly in 2020 Listings and Accepted Offers. Unfortunately, that V takes place in the middle of the peak season. Other than that 3-month section of the year, 2020 looks like what we'd expect for a normal year.

So now let's take a look at the long-term Inventory and Price trends.

Some pretty obvious trends with AVG Inventory Level and AVG Price. Inventory reaches a peak in Sept/Oct before bottoming out in Jan/Feb. Not surprisingly, Price tends to have an opposite reaction. Prices are highest during Jan/Feb and lowest in the fall/winter.

We can see just how disruptive COVID was for Inventory in 2020. Once Supply took a hit, Inventory never recovered. This may have helped AVG Price remain stable between $380k & $400k range.

The low set in 2020 reverses the trend of the two previous years. Starting around 2016, we see the long-term trendline for AVG Inventory Level beginning to round off. Coming into 2020, it appeared as if 2017 was going to be the low point for Inventory this cycle since both 2018 and 2019 finished without setting new lows.

2020 was obviously an outlier year, so unless we see another "Black Swan" event I expect 2020 to be the low point in AVG Inventory Level for a very long time.

So what should we learn from this? I can't speak for everyone, so I'll list the points that I stand out the most.

Jan/Feb is the best time to try to sell a property.
Late Summer is the best time to buy as Inventory is at its peak.
2020 was an absurdly tight year for supply/demand, bringing unprecedented low Inventory.
2021 is likely to look like a normal year as we all have adjusted to the realities of COVID.

Madison, Wisconsin

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