Listing success rates say a lot about the Dane County commercial real estate market

Listing success rates for the Dane County Commercial market were at or above 24% during the first 6 years of the decade. Success rates then decreased over the next 3 years and ended at 14% in the year 2008.

That trend continued in 2009. As of November 30th, the listing success rate over the prior 12 months was 6.8%.

Comparing the success rate to the success rates from other forms of Dane County real estate puts the commercial market in perspective.

* commercial success rate = 6.8%
* multifamily success rate = 19.8%
* condo success rate = 38.3%
* single family home success rate = 57%

For more on the latest commercial real estate trends, you can check out our commercial real estate update on the economic trends page at DaneCountyMarket.com .

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

The next UW Credit Union home buyer seminar is January 12th

A quick heads up for first-time home buyers in Dane County: The first UW Credit Union Home Buyer Seminar of the new year is scheduled for Tuesday, January 12th from 6:30 to 8:00 PM. The seminar is free and open to the public.

UWCU offers a number of additional seminars covering other financial topics. You can learn more about them here.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com

Get the character with the condo in Downtown Madison

The Loraine Condominiums offer a truly unique experience in Downtown Madison. With over 90% of all units sold, several condos across a variety of price ranges are available for purchase, starting at $324,900.

One of the reasons Shawn Kriewaldt and I are excited about our new listing is the history and character of the Loraine building itself:

The Hotel Loraine was originally constructed as a luxury hotel in 1924. More recently the city of Madison designated The Loraine as a national historic landmark due to its history, location, and architectural significance. The Loraine has been renovated for modern times, but take one look at the Grand Lobby and you'll see the hotel's original architecture and character have been wonderfully restored. This video provides a nice view of the Grand Lobby as you enter the front door. This panoramic tour provides another nice glimpse (click the lobby thumbnail image at the bottom of the page to load the lobby tour).




The Loraine offers much more than history and character. Soon we'll share more reasons why The Loraine Condos offer a unique value proposition in Downtown Madison.

Happy Holidays,

Dan Miller, Realtor, Keller Williams Realty and DaneCountyMarket.com

Includes contributions from Brandon Grosse, Realtor/Broker, Accord Realty and TheLoraine.com

3 good reasons to start your home search with a mortgage pre-approval

Here are three great reasons to start your home search with a mortgage pre-approval.

1. A mortgage pre-approval helps you focus your search on homes that you can afford.
2. A pre-approval adds more weight to your offer to purchase, and helps you in the event that other buyers are competing for the same home.
3. A pre-approval helps you move through the financing contingency in your offer to purchase more quickly.

The UW Credit Union does a nice job explaining the mortgage pre-approval process in this article. You'll find it on the buying real estate page at DaneCountyMarket.com.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

November Dane County Distressed Property Index sits at 24%

Approximately 24% of the home and condo sales in Dane County are related to foreclosure, according to the Distressed Property Index we developed earlier this year. The November index decreased slightly from the index level in October.

The November index decreased because home and condo sales have been increasing at a faster rate than foreclosures. We don't believe this is a start of a long-term trend - and for two reasons. First, the recent rise in home and condo sales is due in large part to the home buyer tax credits. Second, some lenders have been implementing foreclosure moratoriums. Both of these are temporary measures. We expect the index to remain above . 2 for at least the next 6 to 12 months.

Have a good one,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Thinking of selling? Here's how the latest version of the tax credit affects you.

June is typically the highest volume month for closings in our market. In a "normal" year we would recommend putting your home on the market by March 1st. This date ensures your home gets plenty of exposure to all of the buyers that begin to come out of the woodwork in the late winter and early spring.

However, we have the latest version of the home buyer tax credit in place. This version of the tax credit applies to both first-time home buyers and buyers who sell one home to buy another. The trick is the tax credit can only be claimed by buyers who have an accepted offer by April 30th and close by June 30th.

As we saw in the month of November, the tax credit deadline can have a huge impact on the market. Dane County home and condo sales more than doubled last month - due in large part to first-time home buyers rushing in to beat the previous tax credit deadline of November 30th.

It's impossible to predict the future. But it's very possible all of the recent housing stimulus efforts will end up stealing buyer demand from the future - when interest rates are higher and there are no more stimulus programs in place.

So, if you need to sell, and if you have not already listed your home, we strongly suggest you consider listing during the month of January. And while you're at it make sure your home is aggressively marketed and competitively priced. We don't have a crystal ball, but we do know tax credit deadlines have a tremendous impact on the market. The next four months offer a window of opportunity for buyers and sellers alike.

Have a good Sunday,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Now it's easy to find properties for sale in Verona, Middleton, Fitchburg, Sun Prairie and Waunakee

We have 5 newer web sites built off the DaneCountyMarket.com platform which focus on real estate in Verona, Middleton, Fitchburg, Sun Prairie and Waunakee. One of the nice things about each of these sites is it's now very easy to find the local homes and condos for sale in each location.

For example, if you want an easy way to always know the homes and condos for sale in Verona, all you need to do now is go to VeronaRealEstateMarket.com. Here you'll find a SEE ALL VERONA HOMES button and a SEE ALL VERONA CONDOS button.

Both of the above search buttons query the active listings in Verona and display the results in order by price. You can choose to switch the display from ascending to descending to more easily focus on your price range. Here's a sample display for Verona homes.

We'll be adding more useful features to these sites in the near future. In the meantime, please feel free to check out our search tools at any of the following sites:

• http://www.veronarealestatemarket.com/
• http://www.middletonrealestatemarket.com/
• http://www.fitchburgrealestatemarket.com/
• http://www.sunprairierealestatemarket.com/
• http://www.waunakeerealestatemarket.com/

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Dane County home and condo sales up 126% in November

Our preliminary statistics from the South Central Wisconsin MLS are in for the month of November, and the headline is not a typo.

Dane County home and condo sales jumped from 212 in November of 2008 to 479 last month, an increase of 126%. November's median price for Dane County homes and condos was $192,000, down from last November's $215,950, a decrease of 10.7%.

The huge increase in sales was due to two factors. First, sales last November plunged after the stock market crashed in September of 2008. Second, many home buyers this November rushed to cash in on the first-time home buyer tax credit that was set to expire on November 30th.

For more details, your can check out our full report at DaneCountyMarket.com .

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Multifamily investment term #2: debt service coverage ratio

We recently wrote about net operating income (NOI), which is the cash that remains after accounting for all revenues and expenses related to a property's operations. Note loan payments are not considered operating expenses; they do not contribute to the expenses that are used to determine NOI.

However, loan payments are used to determine a property's debt service coverage ratio (DSCR). The debt service coverage ratio is a ratio that measures the cash that is available after all loan payments are taken into account. In other words:

DSCR = (Net Operating Income)/(Annual Loan Payments)

The debt service coverage ratio is important because in addition to setting a maximum loan to value ratio, most lenders will require a minimum debt service coverage ratio before a loan can be issued.

For example, suppose a lender requires a minimum DSCR of 1.25.

Now suppose the annual net operating income for the subject property is $150,000, and the annual payments for the desired loan are $125,000.

DSCR = ($150,000)/($125,000) = 1.2

In this case the DSCR does not meet the lender's minimum requirements. The financed amount would need to be reduced in order to bring the annual loan payments down and the DSCR up to the lender's minimum standard of 1.25.

Soon we'll cover another important loan constraint - the loan to value ratio.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Dane County foreclosures up 24% in November

Foreclosures were up again in Dane County, increasing from 127 in November of 2008 to 157 last month. November marked the 32nd straight month of year-over-year foreclosure increases in Dane County.

For our full foreclosure report, you can check out the economic trends page at DaneCountyMarket.com .

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Housing starts sluggish in November

Dane County housing starts were sluggish again in November. A total of 37 housing starts were recorded in November, compared to 35 in November of 2008. The graph below provides a clear picture of how the new construction market has been trending since the beginning of 2005.




Year-to-date, housing starts are down 16.4% compared to the same time period last year.

Thanks to Dominic Collar from MTD Marketing Services of Wisconsin for sharing his data. For more information, you can contact Dominic directly at 920/993-8435. You can also check out our full housing start report on the real estate trends page at DaneCountyMarket.com .

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Dane County months of inventory DECREASE

Dane County home and condo inventory stood at 10.3 months on November 30th, down from 10.8 months on November 30th of 2008. That's the first time inventory has decreased on a year-over-year basis since we started tracking this statistic in 2007.

Inventory for homes only stood at 7.8 months on November 30th, down from 8.2 months a year ago. Condo only inventory stood at 18.7 months, compared to 18.9 months a year ago.

This is an encouraging trend, but keep in mind much of the inventory depletion has been in the lowest price categories due to the implementation of the first-time home buyer tax credit. As you'll see below, inventory varies significantly by price range.

Here's how inventory varies by price range for homes only.

And here's how condo only inventory varies by price range.

Generally speaking, today's sellers have the most leverage in the home category for properties priced at $275,000 and under. Buyers have the clear advantage in the higher priced home categories, and in all price categories of the condo market.

For information on how home and condo inventory varies by location, you can check out the buying real estate page at DaneCountyMarket.com.

Have a good weekend,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Mortgage rates reach all-time lows

If you've been waiting to lock in your rate, the time to act is now.

Mortgage rates have dropped to all-time lows according to the latest weekly mortgage market survey conducted by Freddie Mac. According to survey results released on December 3rd, the average commitment rate for a 30 year fixed rate loan was 4.71%. The average for a 15 year fixed rate loan was 4.27%.

This graph puts current rates in perspective. It shows the annual averages for the years 1992 through 2007, followed by the monthly averages for each month since January of 2008.

For our full mortgage report, visit the economic trends page at DaneCountyMarket.com. You can view the latest mortgage rates updated daily on the mortgage home page at uwcu.org.

UW Credit Union offering $500 off closing costs through April 30th

UW Credit Union is offering $500 off closing costs through April 30th.

In case you missed it, UWCU recently joined our DaneCountyMarket.com web site. Now our web site users can research the market, search for properties, monitor interest rates, and apply for a loan all from one online location.

UWCU will be contributing a number of educational articles to our site in the very near feature. Needless to say we're ecstatic to have UWCU joining DaneCountyMarket.com, making it an even better resource for the consumer seeking comprehensive and reliable real estate information - without any strings.

Have a great day,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Dane County multifamily sales down in October

Only 8 Dane County multifamily listings totaling 21 units sold via the South Central Wisconsin MLS in October. As you'll see below, the demand for multifamily real estate has decreased significantly in the last year.

This trend is even more apparent when viewed in the context of the past decade. The 455 units sold over the last 12 months are lower by 58% from the 1,077 units sold during the peak sales year of 2002.

As we've pointed out before, with high supply and low sales, now is a great time to learn more about multifamily real estate. For more on the multifamily market, you can check out our monthly report on MadisonIncomeProperties.com.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Dane County commercial real estate sales still decreasing

While sales for Dane County homes and condos have been on the rise due to the homebuyer tax credit, commercial real estate sales in Dane County have fallen dramatically.

Just over $10.1 million in commercial real estate sold via the MLS during the 12 month period that ended on October 31st, compared to $28.1 million from the previous 12 months. That's a decrease of 64%.



Most recently, zero sales occurred via the MLS in September. Two sales totaling $205,000 occurred during the month of October.

For more on the latest commercial real estate trends, visit our commercial real estate update on the economic trends page at DaneCountyMarket.com .

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com