The 25th of each month is the day when we get to see the latest existing-home sales report that is published by the National Association of REALTORS®, so it is a day marked on my calendar for monthly action.
I always look forward to both reading the report as well as reading and hearing the interpretation and forecasts that are derived as a result of others reading the report.
Yesterday was no exception. While celebrating the birthday of my "way too good for me" wife with our children at a local restaurant, we bumped into a family friend who happens to be an accomplished real estate investor.
She mentioned the fact that she heard that home sales were dropping, and I knew immediately she must have been reading articles related to yesterday's REALTOR® report. If you didn't happen to catch it, the report summary does not sound very good.
January 25, 2010 - After a rising surge from September through November, existing-home sales fell as expected in December after first-time buyers rushed to complete sales before the original November deadline for the tax credit. However, prices rose from December 2008 and annual sales improved in 2009.
Unfortunately, this national housing report (and the conclusion that it reaches) is not really based upon the entire real estate market. In fact, there is much of the market that is does not capture, with REALTOR® sales usually representing only 50-67% of the entire housing market. These national REALTOR® home sales reports are based upon MLS information, yet there is much more information available for us to review.
When I look at the entire housing market in Tallahassee, my report summary for December looks quite different:
January 25, 2010 - After seeing a 39 month series of declining home sales end in October, existing-home sales rose dramatically in December, aided by a developer "1 Day Sale" and many first-time home buyers rushing to complete sales to lock-in on the Homestead Tax Exemption. However, prices continued to drop from December 2008 and annual sales declined in 2009, making 2009 the worst year on record going back to 1991.
The Tallahassee housing report is almost completely opposite from the report delivered by the National Association of REALTORS®. When we consider all of the sales that occurred outside of the Tallahassee MLS, then we see that December was a big month for the Tallahassee housing market. And this is good!
The real estate graph above shows a significant increase in year over year home sales in Tallahassee (this graph contains both new and existing home sales, but a graph of just existing home sales would be very similar).
Home values in Tallahassee continue to drop, mostly due to the imbalance between supply and demand. If you have not "bookmarked" our Tallahassee Housing Report, then you are missing out on the best resource for information on the Tallahassee housing market. This site is updated daily, with new charts, graphs, and analysis of the Tallahassee real estate market.
Keep An Eye On Supply And Demand Of Housing
We report on housing inventory and the current state of the supply and demand of homes for sale in Tallahassee. It is this relationship between supply and demand that will help us forecast future value trends. With the current glut of homes for sale in Tallahassee, we know that pricing pressure will continue until the market returns to a state of equilibrium.
With more than double the number of homes for sale than in a balanced housing market, Tallahassee still has quite a ways to go to reach market equilibrium. We will continue to monitor the changes and report the results in our Tallahassee Housing Report.
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.