Dane Northwest Middleton Schools Sales 2011

One area that gets an abundance of attention from relocating families is the NW corridor of Dane County, Middleton Schools. Because this area is outside of the Beltline, we should include Blackhawk Neighborhood in the discussion.

A review of sales of 19 homes for $600,000 and above over the last twelve months might reveal a trend to pay attention to in 2012. I've written about assessments in previous blog posts and hopefully I've been clear that I don't want to put too much weight on assessments when doing market analysis. Just the same, there is no way of avoiding assessment numbers when the buying side of the market is looking to the assessment number to argue for their offer positions. We can't look the other way and say it doesn't matter when it does matter to somebody in the discussion.  With that disclaimer out of the way, let's review 2011.

It was early spring and I started to hear "Your price is too high. Homes are selling for a lot less than assessment." It wasn't just bargain shopping buyers saying that, seasoned Buyer Agent Realtors were telling me I was wrong too. If I was going to enter this debate I decided to do some homework. A review of multiple neighborhoods around Dane County showed that there were pockets where the price to assessment ratio was upside down, but overall the sales prices where still far more than the majority ahead of the assessments. But the damage was done. The buyer sentiment was set. And the mode of operation was: See assessment first, then price. If price is greater than assessment, look no further, conclude price is wrong. 


My 19 sale group of homes shows this:

Sale price as a % of Assessment:                100.43%
Sale price as a % of First Asking Price:        91.54%
Sale price as a % of Last Asking Price:         94.01%

Days on the market average:                        138 days

Of the nineteen sales, 7 were in the Town of Middleton. Six of those 7 homes sold for less than the assessed value. The City of Madison (Blackhawk) recorded ten of the sales and every one of those homes sold for over the assessed value.

I read this data as a suggestion that owners will attract the attention of buyers when their price meets the buyer's expectation, and the buyers might expect the price to line up close to the assessment in the Town of Middleton.  In Blackhawk, buyers who expect to be able to buy homes below assessed value may have  no success arguing their case.

There are sixteen homes on the market today in the same area. Only 5 are priced below assessment, and the average price to assessment is 105.35%. The average price reduction already has been greater than 6.5%. Maybe those owners started with aggressive expectations. The average time on the market for these homes is 249 days. Eight months is a long time to be patient. I wonder if we might be seeing a number of these owners make price adjustments in February. The cumulative effect would be significant to owners who set their prices based on asking prices.