Following one tenant who is about to renew their lease gives a clear view of this month's Madison market. They are living in a two-bedroom apartment and are contemplating whether to buy a home or continue renting.

Looking solely at the rental numbers, this person has no reason to rush. According to the Apartment List November report, the median rent in Madison is $1,526, which dropped by 1.5% just in October.

Compared to a year ago, it is down by 3.7%. By bedroom count, the one-bedroom averages $1,397, while the two-bedroom averages $1,606.

The decline is not insignificant. In the same month, the national change was -0.3%, and Madison's monthly change ranked 97th among the top 100 cities, placing it in the lower tier.

From January to October this year, the cumulative drop is 2.1%. Last year during the same period, the decline was only 0.5%, indicating a significant adjustment this year.

However, this does not mean it has become an inexpensive city. The median rent is 10.3% higher than the national average of $1,384, making it the 39th most expensive among the top 100 cities.

But relying solely on this figure for negotiations could be problematic, as Zumper's October data shows a completely different trend.

According to Zumper, the one-bedroom is $1,472, which is a 2% increase from a year ago, while the two-bedroom is $1,932, up 7%. The discrepancy of $326 between the two companies for the same two-bedroom surprised me as well.

Since the sample sizes and calculation methods differ, it's hard to say that one side is wrong. Therefore, I would recommend looking at a few actual listings in the same neighborhood and similar size before relying on company statistics.

If you have received a renewal notice, it might be worth discussing the increase based on those asking prices. The market average around my building is much stronger in negotiations.

Now, let's look at home prices. The October sales statistics are not yet available, so we will refer to the September report from South Central Wisconsin MLS.

The median sale price in Dane County for September is $474,950, which is a 6.7% increase from $445,000 a year ago.

It's important to note that this figure combines single-family homes and condos. The numbers may vary if we isolate just Madison or break it down by neighborhood.

The median for one month can fluctuate, so I also consider the cumulative figures. From January to September, the median is $470,000, which is 4.4% higher than $450,000 during the same period last year.

When compared to the state as a whole, the difference is even more pronounced. According to the Wisconsin Realtors Association (WRA), the statewide median for September is $342,000, with a growth rate of only 1.5%.

A positive change for buyers is the inventory. Active listings in Dane County have increased to 1,322, up 16.3% from 1,137 a year ago.

However, it is still not a relaxed market. The months of inventory have only increased from 2.1 months to 2.4 months, while the state average is 4.4 months.

Sales have not cooled either. Dane County saw 524 sales in September, a 4.2% increase from 503 a year ago, while statewide sales decreased by 2.4%.

The variable is interest rates. According to Freddie Mac's November 5 weekly average, the 30-year fixed rate is 7.18%, compared to 6.22% a year ago.

Fortunately, this is down from 7.40% on October 15, marking three consecutive weeks of decline. The trend is not bad, but the level is still high.

Let's say the previous tenant buys a median-priced home in Dane County with a 20% down payment. If they put down $94,990, they would have a remaining loan of $379,960.

Calculating the monthly principal and interest at 7.18% gives $2,574. If we use 6.22% for the same loan, it would be $2,332, meaning the difference in interest rates results in an additional $242 per month.

This does not yet include property taxes and homeowners insurance. Even so, it is still $968 more than the Apartment List two-bedroom rent of $1,606.

If this person came to me, I would suggest negotiating the terms to extend the lease for another year and take their time looking at the increased inventory. However, if they have already decided on a neighborhood they want to live in and found the right home, it's not worth delaying just because of the interest rate.

There are also two local issues to note. The city planning department has begun community engagement for the North Area Plan and Near West Area Plan this month.

In the North area, there are calls for a variety of housing types and price ranges, and the development around the old Oscar Mayer site is also under discussion. An in-person meeting will be held on November 16 at 6:30 PM at the Warner Park Community Recreation Center, and an online meeting is scheduled for the 17th at 6 PM.

In the Near West area, the city reported that transportation issues are the most discussed topics rather than housing. If you are interested in this area, it might be worth checking out the feedback map on the city's website.

The other issue is data center regulations. According to a city notice on October 27, the zoning approvals for new data centers exceeding 10,000 square feet are currently on hold, and there are no new proposals submitted.

The regulatory framework is still in draft form, so it's too early to say how it will impact home prices or rents. For now, I am taking a wait-and-see approach.

The next figures to watch are twofold. The September MLS report was created on October 16, so we can expect the October figures around mid-month, and Freddie Mac's rates will be updated on November 12.

Loan terms and taxes can vary greatly depending on personal circumstances. Before making any decisions, be sure to get estimates from lenders and check the property taxes for the addresses of interest using city resources.