Always Check Your Sources
I had a reader who formulated an opinion about the Tallahassee Real Estate Market, based upon some statistical figures he found on a web site. I did not agree with his numbers and told him so. He responded with this comment: "Here's the Link. My guess is that the natural demand in Tallahassee might be around 2500 homes per year, or 200 house per month. Last four months of 2007 may be the true indication of demand in Tallahassee. If my estimated demand is true, then we might have enough inventory to last for the next two years. For sale signs are eveywhere in my neighborhood." ___________________________________________________________________________________________________________ Rather than reply in the comments section, I figured this would make a good, informative blog. The reader is "my kind of guy/gal" in that he or she is doing his homework. It always make sense to study the market before making a decision. So, I followed his link, thankful that he provided it. It turns out the link goes to a "statistical" site that gets its information from FAR (The Florida Association of Realtors). That means they get their information from a collection of Realtor MLS's, which usually contain somewhere between 45% and 65% of the entire market. Many sales in the market are not recorded in an MLS, including some Realtor sales that the Realtor did not need to use the MLS for marketing. Additionally, there are sales that have no Realtor invoived (such as some builder sales and some "For Sale By Owner" sales) which means the MLS cannot be viewed as the "end all" for housing demand. Below, I have provided the real numbers. My data comes from a company called Metro Market Trends which actually goes to the Leon County Courthouse and pulls the recorded sales information. This includes all the sales in the MLS. It also includes sales not in the MLS (which could be 1/3rd to 1/2 of the market). As you can see, we have had growth for the past twelve years (which correlates to the growth in population during that same time). Graphically, this information looks like below. The blue (measured on the left) represents the "average monthly sales for each year), the red (measured on the right) is the annual residential sales, while the green (measured on the left) is the linear trend for monthly sales. So, in my opinion, I think the Tallahassee housing market is growing. There will be years where we slide backwards, just as there will be years that the market will surge ahead. But based upon my study of the market, it appears that the number of residences that will sell each month (on annual average) is growing towards 575 (see the green linear trend line). I feel very confident that 2008 WILL NOT aveage 575 units per month, but when we look back ten years from now, I believe that the trend line will continue to be moving up.
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Charles, great question. I had once heard this statistic, so I now measure it for myself in the Tallahassee Real Estate Market. Every month when I get the data for the entire market, I then download the same information from the MLS. I do the division and track this statistic as "Realtor Share" of the market. Right now, we are seeing the MLS at a 5-year high of 65%.
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