Tallahassee Housing Supply - By The Numbers

Posted by Joe Manausa on Thursday, October 16th, 2008 at 7:53am.

Home Supply Trends GraphOnce a month, I go into the Tallahassee Board of REALTORS® Multiple Listing Service (MLS) and download two key sets of information. I look at all the active home listings (Condominiums, Townhouses, and single family detached homes for sale) and then I compile a list of all the ones that have sold in the past year. By combining both sets of data, I am able to determine how many months of supply of homes are on the market in Tallahassee.

Over 13 Months Of Tallahassee Homes In Inventory

Even though we are seeing the supply of homes in Tallahassee continue to drop, the decreased sales activity is resulting in an increase in the months of supply of homes. By graphing the four quadrants of Leon County (the Tallahassee real estate market), we can see that some areas and price points result in over 7 years worth of home supply!

Home Supply in Tallahassee

If you consider that 5-7 months of supply is typically considered a balanced market, this is not a pretty picture.

Months Of Supply Of Homes In Northeast Tallahassee

Northeast Tallahassee is doing the best of the four quadrants in Leon County, but it has too many homes for sale. If we take a look at the following chart, we see that nearly every price range is well beyond the 5-7 months of supply of homes for sale.

Northeast Tallahassee home supply

From this chart we see that homes priced from $250K - $300K have over a years' supply, with resales over 13 months. In a nutshell, this means if sales continue at the pace they have performed over the past year, we can go over 13 months without running out of home (and that is assuming no other homes come on the market!).

Months Of Supply Of Homes In Northwest Tallahassee

Northwest Tallahassee has some serious oversupply situations. Look at the highlighted portion of the following chart: Northwest Tallahassee Housing Chart The chart above shows that the MLS has 148 homes for sale in Northwest Tallahassee and yet we only experienced 21 sales in that price range last year. That amounts to over 84 months (7 years) of supply, and over 25 years supply of new construction. Ouch!

Months Of Supply Of Homes In Southeast Tallahassee

With over a year's worth of homes, the housing situation in Southeast Tallahassee is just a little better than average, but only by a few days supply. Southeast Tallahassee Home Supply The 13.0 months of supply of homes in Southeast Tallahassee is only 3 days better than the 13.1 months of supply that we see across the entire Tallahassee real estate market.

Months Of Supply Of Homes In Southwest Tallahassee

With over 18 months of supply of homes for sale in Southwest Tallahassee, you have to wonder how the homeowners are hanging in there. Southwest Tallahassee Home Supply

Download Your Free Housing Report

Would you like to have a handy, 1 page reference guide to housing supply in Tallahassee? If so, just click on the link to download the free Tallahassee housing supply report.

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Joe Manausa is a real estate investor and the Broker and Co-Owner of Joe Manausa Real Estate. 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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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.

6 Responses to "Tallahassee Housing Supply - By The Numbers"

Greg wrote: I was wondering what you think the impact of the recent steep increase in mortgage rates, the recession, and the state budget deficit will have on the housing market in Tallahassee. Say you had a client who wanted to buy a 400-500k house for cash but was content to wait it out by renting. When would you advise the client to pull the trigger?

Posted on Thursday, October 16th, 2008 at 4:25pm.

Joe Manausa wrote: Hey Greg, thanks for coming back. To answer your question, I would need to know more information about the buyer. A few key pieces of information would include:

* How long will the client be living here
* What rate loan can the buyer attain
* What is available for lease in the standard that they are seeking
* How important is short-term gain issues versus standard of living (most of my $400-$500K buyers are living a lifestyle where they want a certain standard of living and are willing to pay for it)

As far as "when to pull the trigger," .... this is a question better suited to an investor, not an occupant.

I hope this is not too vague, but again, home buyers are not just buying an investment, rather they are buying a lifestyle that will also serve as an investment. Each buyer is unique and I pattern my responses based upon their individual needs.

Posted on Thursday, October 16th, 2008 at 7:42pm.

Greg wrote: Joe, I never left, despite the rantings by real estate professionals to my viewpoint.

I don't understand why an "occupant" would care less about the possibility of buying into a crashing market than an "investor." 50k (or whatever the amount saved by waiting) is worth the same to both.

I imagine you'll say something like occupants would care about the reduced standard of living while they are renting (unlike investors), but at least for me that "cost" is more than offset by the benefit of watching my cash account grow and home values drop. Quite frankly, renting right now is an absolute joy.

I guess this all comes down to whether "housing is different" than any other asset. In my view, it's simply not.

Posted on Thursday, October 16th, 2008 at 9:37pm.

Joe Manausa wrote: Greg, your closing comment hits the nail on the head. To you, housing is just another asset that you buy (or do not buy) based upon your expectation of future value. I have worked with individuals (and a few families) with that same outlook. To others, a home is their core. They will live and die there. As an example, my parents raised us in a home in Tallahassee that they occupied for over 20 years, and now live in the "new" home for over 20 years. Market timing was not important to them.

Again, you pegged the answer, it's a personal opinion/decision which is based upon many factors, only one of them being short-term financial concerns.

Posted on Friday, October 17th, 2008 at 9:04am.

Greg wrote: We live in a new world now. I don't think there's any recent historical precedent to which to compare this ugly situation, where housing prices are absolutely collapsing. If home prices were stagnant in nominal terms (which would mean that they are depreciating in an otherwise inflationary market) or even just slightly falling, I don't think buyers would have nearly the same hesitancy to buy. I believe that buyers' attitudes in the past have been influenced by the notion that home prices would never fall or at least would never fall significantly. If you assume this, then timing is relatively unimportant. Now buyers realize that if they rush into buying they could lose large amounts of money in the blink of an eye. Thus, they are rightfully sitting in the sideline waiting for sellers to realize what's going on (as builders apparently have already done--see the housing starts data today). Your own evidence on inventory shows that buyers are extremely hesitant. Thus, your own evidence seems to suggest that there are a lot more "wait for the other shoe to drop" buyers than "must live in my own house right now, damn the price" buyers.

Posted on Friday, October 17th, 2008 at 12:12pm.

Anne wrote: Greg,
Has it been six months already?!?
Anne

Posted on Saturday, October 18th, 2008 at 1:25am.

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