New single family permit and sales activity has been declining in the Tallahassee real estate market since January of 2006. While this is bad news for Tallahassee home builders, it is good news for the stabilization of the Tallahassee housing market.
The massive number of new homes that were built in 2004 and 2005 are a major reason that the Tallahassee real estate market continues to suffer from a glut of inventory. As we have discussed often in the past, it is our over-supply of homes for sale that creates the pricing pressure that has caused depreciation in our homes.
What this real estate graph shows is that new home permit and sales averages have dropped below 50 per month. Compare that with the 140+ per month average that we were seeing at the height of the production boom in 2005! With new home permits in Tallahassee at the lowest levels in 19 years, it's no wonder we have seen home inventory levels drop over 800 units in the past year.
As always, keep your eye on inventory levels in the Tallahassee real estate market and you will be prepared for the market turn. Once we see a balance of 6 months of supply, we should start to see the turn from depreciation to appreciation.
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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.