Defining The Turn In The Housing Market
Perhaps the first thing I need to do is to define what I mean by "the turn in the housing market." In Tallahassee, we are currently seeing fewer and fewer homes sold on a daily basis (take the past 365 days, count the number of homes sold, divide by 365). By looking at a real estate graph of daily home sales, we can say that the housing market is clearly getting worse each day.
Another Way To Look For The Housing Market TurnMonitoring the daily home buyer activity graph is a bit tedious to say the least. While we consider it important (as well as update the graph at The Market Bulletin twice per week), we also could just review Year-Over-Year performance to see if we have a chance of a market turn. As you can see from the real estate graph above, we have experienced 35 straight year-over-year declines in the Tallahassee real estate market! Notice that no such streak exists (whether positively or negatively) in past, with the previous record on continual runs in the market to be at 9 months at the most! This tells you how severe this current downward trend really is.
Predicting The Housing Market Turn In TallahasseeSome of the factors that affect our housing market in Tallahassee are the same as in any other market in America. These include employment rates, mortgage rates and availability, and consumer confidence. But even with the current projected job and budget cuts at the Universities and the State, Tallahassee is projected to having one of the more stable economies in the State of Florida. Additionally, most economic forecasts predict population growth in Tallahassee! So, what is my prediction ... I based my prediction on the following:
- The Tallahassee housing market has fallen 63% from the peak (extreme decline)
- Tallahassee population growth is near or greater than 0% (meaning no real decline)
- There is a statistical correlation between population size and home sales activity
- Home affordability is equivalent to levels found in 2004
- First Time Homebuyer Program Is Providing "Free Money" for Buyers through November
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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.