The Market For Home Building In Tallahassee

Posted by Joe Manausa on Friday, January 23rd, 2009 at 11:36am.

build-a-house-in-tallahasseeWith all the talk and commentary that the Tallahassee Real Estate Blog has focused on housing inventory, you would think that we would have dedicated quite a few articles on new construction in the Tallahassee real estate market. But the fact is, we have always included our permits and sales charts in our Monthly real estate market reports.

So, why do I bring this up now? Because we have seen the average monthly single family permit activity drop to a level lower than at any time since I have been tracking it. This is absolutely terrible news for the new home construction industry (and all the people who work in or on the fringe of that industry), but it is also what the housing market needs to return to a normal balance of supply and demand. The real estate graphs below demonstrate the extreme turn that the new home construction market has taken in Tallahassee.

Tallahassee Permits And Sales At 12+ Year Lows (or Longer)

My Tallahassee real estate data goes back to January of 1991, but I have been charting the new permits versus new sales since February of 1996. The following graph shows the average monthly permits and the average monthly sales (12 month average) since that time. Note how we are clearly at the lowest point now.

tallahassee-permits-and-new-construction-sales

We have been averaging 94 permits per month and 92 sales per month since February of 1996. In 2008, we average 53 new permits per month and 52 new sales. This has to be helping the inventorysituation by almost 40 homes per month. In the month of december, 30 homes were permitted, while 37 new home sales were recorded.

Tallahassee Single Family Home Construction Trend

Another way to look at new construction in Tallahassee is to examine the difference between new permits and new sales. By tracking this differential, we can see whether we are in a period of consumption (more sales occurring than permits) or a period of growth (more permits occurring than sales). The following real estate graph shows where we have been and that we appear to be fairly balanced at the current time.

tallahassee-single-family-home-construction

Tallahassee New Single Family Home Sales Down

To give this some perspective, the following real estate graph shows in great clarity how far the unit sales have dropped. If you follow the blue vertical columns, from right to left, you will see that unit sales climbed from 1,000 up to nearly 1,600 from 2001 to 2005, but since has fallen into the 600's. I'm not sure how long the builders can hold out, but this reduced construction will help the overall health of the market.

tallahassee-new-single-family-homes

See A Video On Home Construction

 
Subscribe in a reader Subscribe by email


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. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

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 Subscribe by Email. You will be able to stay informed about the happenings in the Tallahassee Real Estate Market.
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.
View Joe Manausa's profile on LinkedIn

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.

2 Responses to "The Market For Home Building In Tallahassee"

Brittney Johnson wrote: Mr. Manausa,
I enjoyed reading your blog this morning. Although, I have to say that is was the first blog that I have read on this topic and it was a bit surprising to me.
Your graphs on this blog were amazing. What software or program did you use to create them?
Just a personal note- I have a family member that is in the construction business and not only is the home market down but so is the store construction, which I am sure you are aware of. I sure do hope that everything turns around before more people are out of a job. Thanks, Brittney

Posted on Friday, January 23rd, 2009 at 3:32pm.

Joe Manausa wrote: Thank you Brittney. MS Excel does a great job of converting numbers to pictures, that is why I rely on it so much.

Posted on Friday, January 23rd, 2009 at 4:40pm.

Leave a Comment