How Real Estate Supply And Demand Changes Impact The Market
If you are curious about how recent real estate supply and demand changes will impact the Tallahassee real estate market, then you should monitor our monthly inventory reports.
Right about this time each month, we scrub the listings and sales recorded in the Tallahassee MLS to produce several reports, one of which we develop into a free, downloadable pdf report that all of our real estate agents carry with them. You can do the same (if you are as obsessed as we are with real estate in Tallahassee, Florida :)).
Real Estate Supply And Demand Changes
The following table shows the changes in the relative supply of houses on the market for each area and each price range in the Tallahassee real estate market. The figures represent "months of supply" changes, where red means that supply was reduced, and black means that supply increased. You might be surprised at some of the areas where supply increased:
You might wonder how the "hottest" segment of the market, homes priced from $125,000 to $200,000 in Northeast Tallahassee, actually grew in relative supply. Believe it or not, the answer is simple.
The unmotivated sellers of last year who failed to sell their homes in the $200,000 to $250,000 price range have been lowering their asking prices, and these have become the new bargains in the next lowest price range. And this has happened all across the Tallahassee real estate market, where the higher price ranges have been feeding those directly below. Overall, we have seen the supply of homes for sale in Tallahassee reduced by 1.6 months of supply over the past year.
What Homebuyers Face In The Market
The good news for homebuyers is that the inventory of houses they will encounter are "more available" than what they would have found in March 2013.
The real estate graph above shows that roughly 28 percent of the homes listed for sale in Tallahassee are already under contract. That means if you go to some of the national real estate websites and look at homes, their less-than-current-information will be showing many, many homes that are either already under contract and in many cases, already sold and closed with new buyers.
Last year at this time, more than 35% of homes in the MLS were already under contract, so this means that buyers will have more opportunities when they go look for houses, even though we have seen a decline in relative supply.
A Picture Of The Housing Market
So if you are interested in buying a home anywhere in Tallahassee, the following graph gives you an idea of what to expect for both supply and demand. This graph is an overview of the market, so it would look different if you were to target a specific area (and we can help with that too :)).
While there is a lot of information in the graph above, it is actually fairly simple once I get you acclimated to its design.
First of all, the base of the graph shows each price range that we monitor. Above each range you'll see a red bar (the number of active listings in that price range) and a green bar (the number of sales over the past year). Finally, you will see a blue line that computes the relative supply of homes (months of supply) for each price range. The yellow band represents market equilibrium (a balance between supply and demand).
So anywhere we see the blue line inside of the yellow field, we can say that the market is balanced. If the blue line is below the yellow field (it is not), then we would say that it is a seller's market for that price range. If the blue line is above the yellow field, then we would say that it is a buyer's market for that price range.
Looking at the graph, there are several price ranges that appear to be in balance, while the rest are still fighting an excess of supply (too many homes on the market). The luxury homes for sale in Tallahassee are clearly out of balance and buyers will continue to find exceptional home values above $500,000 everywhere.
The prudent homebuyer is still the King of the market, but serious sellers can get top dollar when they sell their homes, so long as they implement an aggressive home selling plan that utilizes a heavy does of daily internet marketing. If you are thinking of selling and want to know what you'd fetch in today's market, just drop me a note and we can help you devise a winning home selling strategy.