Hey Joe, How's The Real Estate Market?
I'm starting to get this question a lot when I run into friends I have not seen in a while. They ask "hey Joe, how's the real estate market?"
Depending on how much time the environment allows, I either answer "are you reading my Tallahassee Real Estate Newsletter?" or I go into a little detail of what I've recently reported.
As a homeowner myself, I base the answer upon my opinion of how easy it is for somebody to sell their home if they decide to move. For example, back in 2012 when more than half of home sellers failed to sell their home when they were first listed, my opinion of the housing market in Tallahassee was not very good.
But times change. Market cycles come and go, and now we are in a much better market. So if you are wonder how the real estate market in Tallahassee is today, let me show you how we derive the first half of the answer.
Tallahassee Real Estate Market Snapshot
There are two elements on how we evaluate the strength of the housing market. Unit sales (meaning how many homes are selling compared with historical sales volume), and home values (meaning what is the long-term status of real estate appreciation in Tallahassee).
For the purpose of today's short report, we'll just focus on unit sales.
The very simple graph above shows year-to-date home sales through July of each year. So how's the real estate market? Better than it has been for the past 8 years! That is good news.
Currently, we are seeing the same number of people move in Tallahassee as we did back in 1997, yet our current population is roughly 30% larger than it was back then. Either people are moving less frequently today, or there is something else going on.
The "something else" is likely related to home values declining by a third during the collapse of the housing market, and the resulting trap many homeowners face owing more on their homes that they are currently worth.
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Year Over Year Home Sales
So to further examine unit sales, it would be prudent to identify the current trend. Are we having a good year due to one good month? Or is the market taking steady strides towards improvement? This next graph helps answer those questions.
The year over year graph allows us to compare the current month with the same month one year prior. The current trend is VERY positive, as every single month this year has been better than the corresponding month in 2014.
Housing Market Conditions Summary
So what do I say about the market based upon unit sales? Things are improving steadily. The more homes that are sold (demand), the better our current supply situation will be. Increased demand will eventually result in higher values, which in turn will help many of the trapped homeowners to move and thus restore the "normal" rate of home sales to which Tallahassee was accustomed in the past.
As far as the second part of the answer to "how is the real estate market?" ... why not subscribe to the Tallahassee Real Estate Newsletter and check out our weekly special report on home values coming out next Monday!