Pending home sales fell with the expiration of the Homebuyer Tax Credit, just as we predicted, so I felt it would be interesting to see how the Tallahassee real estate market fared versus the rest of the national real estate market.
Today, RISMedia, a leader in real estate information systems, reported that pending home sales fell 30% nationally from April to May, and were down nearly 16% from the same time 1 year ago. Regarding the drop, the chief lobbyist (er, I mean Economist) for the National Association of REALTORS® Lawrence Yun said:
“Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June,” he said. “Surprisingly, though, some local markets such as Portland, Maine and Jacksonville, Fla., actually experienced an increase in contract signings from a year ago without the tax credit. Existing-home sales that close in June will remain elevated, but we’ll then see a notable decline for July and August.”
This is a very nice conclusion, but I am more concerned with the level of the decline than Dr. Yun seems to be. It's not like the market had soared above historical normals prior to the 30% decline, rather we had only seen signs that the national housing market was struggling to begin its recovery.
Pending Home Sales In Tallahassee Fare Better
Using a similar measurement, our pending home sales in Tallahassee only dropped 10% from April to May, but were still up 4.2% over May of last year. This would seem to indicate that Tallahassee has seen far less of an impact from the ending of the tax credit than has the rest of the country.
In the real estate graph above, the yellow area shows the monthly change in current number of properties that are currently under contract in the Tallahassee Board of REALTORS Multiple Listing System, while the purple bars measure the year over year change of pending home sales. At the far right, we can see that the monthly change in May (yellow) was down 10%, but year over year change (purple) was up 4%.
Want to stay "up to speed" on what is happening with pending home sales and other key market measurements? Just click here to subscribe to the Tallahassee Real Estate Newsletter, and you will receive a monthly report containing charts, graphs, and analysis of the Tallahassee real estate market.
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.