The inventory of homes for sale in Tallahassee has been continually dropping for quite some time. Unfortunately, the rate at which people are buying homes in Tallahassee has been dropping too. As a matter of fact, the rate at which homes are selling is dropping faster than the supply, meaning that we are still seeing growth in relative home inventory.
Relative home inventory is measured in "months of supply," and it is the measurement of the total inventory of homes divided by the current demand (the current rate of home sales in the Tallahassee real estate market). In order to best understand the supply and demand dynamics in the Tallahassee real estate market, we graph three key trends and continually watch them for change:
- Total Number Of Residential Listings In The Tallahassee MLS
- Total Number Of Sales In The Tallahassee MLS
- Current Months Of Supply Of Homes In The Tallahassee MLS
When we look at the real estate graph (see below) of these three trends, we have a very clear picture of supply and demand for housing in the Tallahassee MLS:
Supply And Demand For Homes In The Tallahassee MLS
When we look at the graph of supply and demand of homes in the Tallahassee MLS, we see a rising relative supply and a falling real supply. This data is for all the Tallahassee MLS (Leon County, Jefferson County, Gadsden County, Wakulla County & Franklin County), and it shows an alarming level of supply of homes at 21.4 months of supply.
Home Buyers Need In Tallahassee
What this really demonstrates is how far down our buyer activity has dropped. While this is certainly dreadful for those of us in the real estate and construction business, I am very confident that the buyer activity will return. All cycles must come to an end, and this too shall pass. People will not stop moving forever.
The important trend to really keep and eye on is the home inventory level in Tallahassee. We need to see it continue to fall, as it is the glut of homes that is my greatest concern. With the housing market struggling nationwide, we know that foreclosures and short sales have only begun to enter the market. It will take a few years of strong buyer activity to return our inventory levels back to a balanced market.
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Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.