Tallahassee Real Estate Blog

As any of our long-term readers know, we update our Tallahassee Market Bulletin page about twice per week, showing the inventory movement in the Tallahassee real estate market. We have been looking closely at the 180 day trend on inventory flows to hopefully see it drop below the “zero” line and thus show that inventory is being reduced in Tallahassee. Well take a look at this… Read the rest of this entry

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Brand-Spanking New Housing Inventory Report

The key to determining how much a home is worth is being able to put yourself in the buyers’ shoes and look at what their options are. If there is a scarcity of homes, you can press for a higher price for your home. If there is an abundance of homes for sale, you need to price yourself below your competition. So, what if you had a handy one-page report that would help you decide? Read the rest of this entry

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People rely on opinion columns far too often when assessing the future of the real estate market. Much like the stock market, people tend to believe what they read and just follow the herd. But there is any easy way to figure out the current direction of the real estate market and you don’t have to work for NASA to understand it. Read the rest of this entry

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Tallahassee Real Estate Market Report

Just another quick post today (with a thank you to Carol Palacios for delivering the data) on the inventory in the Tallahassee Real Estate Market. I want to remind the readers that you can always find updated information on the supply of homes in Tallahassee at http://www.manausa.com/market.php. The link for all Tallahassee real estate market reports is right on our web site. Read the rest of this entry

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Special occasions occur in life at various times, and when they are acted upon in a timely manner, they can change our destiny. I believe now is one of those times. The “perfect storm” of economic events and global opinion has created a small window of opportunity for us regular people to take advantage of something normally only available to the financially advantaged. Read the rest of this entry

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I’m using this weekend to catch up on a lot of the market data that we have been collecting. As the summer selling season winds to an end and the fall season begins, I wonder how the inventory in the Tallahassee real estate market is going to be affected. If I am to believe that these short term trend graphs will continue to the long-term trend graphs, then we are viewing evidence of the market turn! Read the rest of this entry

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Today’s blog is going to be an update on the inventory of homes in the Tallahassee real estate market. I want to remind the readers that this information can be found, updated twice per week,  on our Tallahassee Real Estate Web site at http://www.manausa.com/market.php. Read the rest of this entry

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You might want to check out our Tallahassee Real Estate Inventory Update again. Every thirty days, I add another long-term trend chart with the goal of eventually having a 365-day trend chart. As you can tell, we just added the 120-day trend graph. Our goal is to monitor as many trends in real estate as possible.

Understanding Trends In Real Estate

With the feedback that I have received on our market update, I think it might be wise to discuss why we publish real estate trend analysis, rather than just charting the daily ups and downs of the market as do many other real estate web sites.

Actual inventory trend analysis helps us to understand the overall movement of our residential inventory over a period of time. Of all the trends in real estate that we study, inventory trends are the most important. The longer the period of time that we study, the less that “noise” affects our view.

So what is “noise” in our analysis of inventory in the Tallahassee market?

• In the short term, noise could be the fact that a majority of our closings occur at the end of the month, therefore the green area of the graph (Departing Inventory) could appear stronger near the end of the month.
• Over the medium term, an example of noise could be a builder’s 50-home subdivision contract expiring and showing 50 homes leaving the market. That same builder could re-list those homes a month later with a new real estate company and the trend would be reversed (though in reality nothing has changed in regards to inventory in the market).
  
• And for long-term, seasonality causes the most noise. Those times of the year when sales either increase or decrease due to natural moving cycles.

The best trend analysis that we can produce is the one-year trend. By constantly looking back 365 days, the analysis will be able to remove all random noise and give the reader the best view of the inventory flow in the real estate market.

And why is this so important? Because supply and demand economics will guide as to the direction of price movement. As a general rule, if supply is dropping, prices will begin to rise (unless something major has happened to demand). The contrary is true as well, as we are currently experiencing in Tallahassee real estate market. Our supply is increasing, and therefore we are seeing prices drop. The study of the supply trend will allow us to know when we should be able to see prices (and thus the market) turn back to appreciation.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

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I was asked by a local Realtor, Penny Herman, to help her prepare some market views for an upcoming interview on Fox Business News, a national broadcast which will occur on July 8th at 4:00 p.m. I’ve known Penny for years, and I can tell you she really hustles and she is a great role model for all of her peers in the industry.

Penny asked that I provide some insight into the current inventory situation in the Tallahassee real estate market. She had seen a prior blog of mine and wanted to be able to share some of the positive signs that we are seeing here in Tallahassee.

If you are a regular reader of the Tallahassee Real Estate Blog, than you have been seeing the general trend of rising inventories. This is not good. I have pointed out many times in the past that we cannot begin to talk about the market turning until we first see a turn in the flow of inventory. I think this is so important that I track inventory movement each and every day (with the great help of our Transaction Coordinator, Carol Palacios).

So, what do I mean by inventory flow? Simply put, I study two major groups of housing inventory each day. Properties that are newly listed for sale, and properties that are no longer for sale. The newly listed properties are ones that become “for sale” on that day, while the ones that are no longer for sale are ones that become “sold, canceled, expired or withdrawn” on that day. With these two groups, we can study inventory much like the tides at the beach. We look to see if the inventory is flowing in (growing) or flow out (declining). When the long-term trend turns to “declining,” we will know that the start of the turn has occurred.

The long-term trend that I am looking for will be the 365 day trend. That trend will remove all seasonality and will establish the true current state of inventory flow in the Tallahassee real estate market. Unfortunately, I only started this measurement this year, so the best we can do for Penny Herman’s real estate presentation is to review the 30, 60, and 90 day trends.

This first graph is the ninety-day trend  of inventory movement in the Tallahassee real estate market. The red area represents homes that are newly listed for sale, while the green area represents homes that are no longer on the market. The yellow area is the difference between the two. When the yellow area is above the “Zero (0.0)” line, we know that the trend still indicates that inventory is growing. The good news that we can take from this chart is that the rate of inventory growth is falling.

This next graph is the sixty-day trend  of inventory movement in the Tallahassee real estate market. The red area represents homes that are newly listed for sale, while the green area represents homes that are no longer on the market. The yellow area is the difference between the two. When the yellow area is above the “Zero (0.0)” line, we know that the trend still indicates that inventory is growing. The good news that we can take from this chart is that the rate of inventory growth has fallen below the zero line at times and it currently just over the zero line.

This final graph is the thirty-day trend  of inventory movement in the Tallahassee real estate market. The red area represents homes that are newly listed for sale, while the green area represents homes that are no longer on the market. The yellow area is the difference between the two. When the yellow area is above the “Zero (0.0)” line, we know that the trend still indicates that inventory is growing. The great news from this graph is that the short-term trend in our market shows inventory shrinking! This could be great news, but it is by no means proof of the market changing….. yet. We need to see this occur on a longer trend.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed, or you can . You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

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Perhaps the question that I get more often than any other is “What do you see happening in the future of the Tallahassee real estate market?”

Unfortunately, I do not have a crystal ball, but I do have data on hand that has been recorded since 1991 and I’m thinking that there might be a way to extrapolate a housing consumption estimate for the future by looking at what has happened in the past.

I have a housing consumption formula that I have produced for this blog posting and I would love to see comments from readers regarding any errors in the model or just commenting on the results of the analysis.

Housing Consumption

My formula has two key points:

º There always exist two types of housing consumers - Discretionary and non-discretionary
º The non-discretionary buyers can be predicted by looking at population changes

Discretionary home consumers are people who buy a home simply because they want to make a move. They typically have just undergone a “life event” that created some type of desire to make a move, whereas non-discretionary buyers pretty much have to move. They have been relocated from one market area to another or have had something happen that requires them to move. While there is certainly some “gray area” between these two extremes, I will consider everybody in either one or the other category when trying to determine a housing consumption estimation.

The demand side of the housing consumption issue is the number of potential buyers for homes in the Tallahassee real estate market. And contrary to popular belief, the number of potential buyers remains relatively constant, moving as the population moves. It is the perception of value that causes more people to consume or the lack of perception of value that causes people to not make a move.

In most markets where the population is changing (whether growing or receding), you can expect the non-discretionary consumer pool to be changing at that same rate. It is this relationship between population change and non-discretionary consumption that might allow one to predict future housing consumption in any given real estate market. The graph below projects my prediction of the housing consumption in the Tallahassee real estate market through 2010. This includes both discretionary and non-discretionary buyers, and is accurate to .0000001% (just kidding).

As you can see from the graph above (and the chart below), the discretionary buyers went on a buying-spree from 2001 through 2006. Prior to that, there was basically 10 years of conservative buying from this group. Currently, we are seeing very little action from the discretionary buyers and it is having a significant affect on housing consumption in the Tallahassee real estate market. Last year, we saw fewer home purchases than we have seen since 1998, and this year will be the worst year for which I have records (I have all years from 1991 to present).

While I will keep my formula for predicting the home sales private for right now, I will disclose that discretionary buyer habits are predictable over a long period of time, but tougher to predict over a shorter term. Looking at the table above, I have predicted 4,390 home sales for the Tallahassee real estate market in 2008. Any error in this number can be applied to the following two years, meaning the predictive model projects housing consumption to be roughly 15,522 for the three years of 2008-2010. Additionally, all population numbers in the past came from the US Census, while the future numbers are my estimates based upon the recent trend of growth in Leon County.

I encourage all the math-wizzes out there to comment on the reasoning in my model. I would like to continue working on the “special sauce” and then start applying it other real estate markets across the United States.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed. You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

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