Every month we pull all the data from the Tallahassee Board of REALTORS® Multiple Listing Service (MLS) in order to determine the months of supply of homes, by price range. This report is a great snapshot that is valuable to people who want to buy a home in Tallahassee as well as to people who want to sell a home in Tallahassee. Think of this as the "competition report" for each price range.
Each area of Leon County (Tallahassee Real Estate Market) is broken down by homes for sale and homes that have been sold. The report shows new home sales as well as resales, and then computes the months of supply of homes (based upon the current rate of sales) for each area and each price range.
Slower Home Sales Cause Higher Levels Of Supply
With home sales continuing to fall, months of supply of homes continues to rise. Additionally, we saw an increase in the total number of homes for sale for the first time in quite a while. The combination of fewer home sales as well as more homes coming on the market at the beginning of the year has caused a growth in both real and relative supply.
The table above is the summary report for home supplies for the Month of March. For example, for homes price d$250,000 to $300,000, there are 38.8 months of supply for the Northwest section of Tallahassee. What this means is that at our current rate of sales, there are enough homes for sale in the Northwest section of Tallahassee, in that price range, to satisfy all of the buyers for the next 3 years and three months!
Balanced Real Estate Markets Seek 6.0 Months Of Supply Of Homes
You might be wondering what all the numbers are supposed to be for a "normal" real estate market. Most people around the country consider 6.0 months of supply to be a balanced or level market. Once the numbers drop below 5.0 months of supply, we consider it a "sellers'" market, whereas when the numbers rise about 7.0 months of supply, we consider it a "buyers'" market. Looking at the real estate chart above, you can see how severe a buyers' market that we are in.
Housing Market Softened Across The Board
When we compare this month with last month, we see most areas and most price ranges actually got worse. Note, if the numbers are in red, that represents a drop (which means supply got better).
So, from the real estate chart above, we see that homes priced $250,000 to $300,000 in the Northwest grew by 2 months of supply during the past month. A home buyer and/or home seller can use this chart to get a feel for the relative competition in the appropriate price range. So, if somebody is looking to sell a home, in the Northwest, priced between $250,000 and $300,000, that person needs to know that competition just got tougher.
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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.