All Forum Posts by: Jack Medford

Welcome to BP @Josh Anderson! Happy to talk through the Madison market with you. I publish data-driven reports about Dane County real estate every 2-ish weeks. Happy to get you access to those if you'd like.

Here is a post about the annual cycles of Dane County real estate and recent trends to give you an idea of the market. 

We've also got a bi-weekly zoom meetup put on by a couple of local BP members. The next meeting is Wednesday the 10th at 7pm.

@Alexander Ballesteros I agree with a lot of what Peter said about Madison. So if you're looking for more affordable cashflow style properties, check out Milwaukee. They have a ton of multifamily inventory, and they are much more affordable than Madison.

@Rebecca Knox and @Matthew Meunier are a few investors out that way that could help get you started. 

Similarly, Rock County like Beloit and Janesville are also more affordable markets that still have decent inventory. Reach out to @Garrett Davis and @Calvin Ozanick

Thanks, @Donald D Michna. And, how embarrassing. Just noticed my glaring typo in the title. 😖

I get the data from the MLS and then run it through Google Data Studio. I produce reports roughly every two weeks. This data comes from the latest report where I look at annual market cycles and recent trends for Dane County and the 6 regions that make it up.

You're absolutely right that supply will likely remain depressed as people are still worried about having strangers in their home. Still, seeing that AVG Daily LIstings is pretty normal outside of the ~3-month window where things drop is an encouraging sign for a return to normalcy. 

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. 

@Brian Wilson I'm extremely bullish on all of Dane County. Madison has been growing like crazy and facing a supply shortage. This shortage has spread to the entire county. Here is one stat to put things in perspective... Between 2001-2016 the state of Wisconsin added 76,510 jobs. 42,976 of those jobs (56%) were in Dane County. This is despite Dane County representing only ~10% of the state's population.

Madison has also begun to receive national recognition for the rate of growth. We are consistently ranking in the top 5 (in the nation) for both quality of life and rapid growth. 

I can't speak as much to the rest of the state, as I am focused here. I will say... While I believe that Madison and Dane County are the most "sure" bet in Wisconsin, you're going to pay a premium. Prices are high, relative to most of the state. Many pure cash flow investors are seeking markets like Rock County and Milwaukee. 

@Joshua Filkill We've also got a virtual meetup by fellow BP members that meets every other Wednesday. Details for the next meetup can be found here.

The west side of Dane County provides a lot of options for house hacking. Verona and Middleton are on the higher end (price-wise) but also considered highly desirable for their school districts. Fitchburg, Mount Horeb, Oregon, and Cross Plains also provide nice potential without being too far away. I'm personally in Mount Horeb and have come to love the community!

Madison provides a ton of options as well. The city is laid out by East and West, and since you're working in Verona, I assume you'd want West. In general terms, the East is more affordable, but the West still has plenty of "affordable" options. Just depends on your budget and how close to your work you'd like to be. 

Last thing I'll say... I produce data reports for real estate investors/professionals and just released my 2021 Market Outlook where I break the county down by its 6 regions. If you'd like a copy, let me know and I can either dm or email it to you. 

@Rebecca Knox may be able to help connect you with the right people. 

@Jennifer L. Welcome to BP! Where about in Wisconsin are you? 

As far as the partnership goes... A lot of people like LLCs to help keep investment assets separate from personal assets, but it is not 100% necessary. You can also draft up partnership documents that govern the business relationship, without forming an official LLC.

Conventional loans are absolutely possible for investment properties. If you go that route, I'd suggest all of you speak with a lender and qualify together. Nothing says you can't all be on the loan, especially since you all have great credit. 

@Mike L. As a matter of fact, yes. I am releasing my 2021 market outlook on Monday. You can subscribe here to here to get access as soon as I post it: https://medfordreport.carrd.co

I also released a Q3 2020 market report back in November. Feel free to dm me your email if you'd like me to send that over. 

It's officially a Bitcoin bull market when "Bitcoin" and "crypto" are blowing up my keyword alerts on BP! 🤣