Back HomeThe 2025 Dane County Housing Recap: Finding the “New Normal”
January 5th, 2026 by keithandkinseyFor years, the Dane County real estate market felt like a sprint that never ended. Between the “pandemic frenzy” of 2021 and the interest rate shocks of 2023, buyers and sellers alike have been looking for a sense of stability.
In 2025, we finally found it. While the market remains competitive, the frantic energy has shifted toward a more calculated, “calmer” pace. Here is a deep dive into the numbers that defined our local market this past year and what they mean for your 2026 plans.
The Headline Stats: Resilience Amid Scarcity
The most telling story of 2025 is the resilience of home values. Despite higher borrowing costs, the median single-family home price in Dane County rose to $480,000. While many markets across the country saw price declines, our local area saw modest, steady gains ranging from 1% to 2.6%, depending on the specific property type and location. This highlights the incredible strength of the Madison-area economy—if prices are still rising while affordability is a challenge, it shows just how much people still want to live here.
Inventory: The Great Tug-of-War
Inventory was a rollercoaster in 2025. We saw a welcome relief toward the middle of the year as inventory “crept up” to 3.4 months. This was a breath of fresh air for buyers, as it led to fewer bidding wars and fewer waived inspections.
However, that relief was short-lived. By December, inventory tightened back down to 2 months. To put that in perspective:
- Balanced Market: 4–6 months of inventory.
- Dane County 2025: Hovered between 2 and 3.4 months.
Because supply remains below 4 months, we are still firmly in a seller’s market, even if it feels “tolerable” to buyers compared to recent years.
Sales Volume vs. Historical Trends
If you felt like there were fewer “For Sale” signs in your neighborhood this year, you weren’t imagining it. Total sales in 2025 were up just 0.8% over 2024.
The more shocking number? Sales are still down 24% compared to the prior 10-year average. This “lock-in effect”—where homeowners stay put to keep their 3% mortgage rates—continues to limit the number of homes hitting the market.
How Fast is the Market Moving?
The “Median Days on Market” tells a story of two different seasons:
- The Peak: At its fastest, the median home in 2025 sold in just 6 days.
- The Year-End Snap: By December, that number climbed to 23 days.
What This Means for Your 2026
If I had to predict 2026, I expect a “sequel” to 2025: a calmer market with flatter price increases.
- For Sellers: You still have the upper hand, but “perfection” matters more now. Buyers are willing to pay your price, but they are increasingly expecting the home to be move-in ready.
- For Buyers: The days of needing to decide on a house in four hours are largely over. You have more breathing room to keep your inspection contingencies and negotiate repairs.
The Bottom Line: Dane County remains one of the most stable places in the country to own real estate. We are moving away from the “chaos” and into a market where both sides can actually sit down at the closing table and feel like they got a fair deal.
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