For five straight years, the high end homes market in Tallahassee has seen increasing demand.
Interest rates have dropped and buyer activity has soared, so why are luxury home sellers having so much trouble selling their homes?
Like all markets, the real estate market is ruled by supply and demand. Let’s start by taking a look at the inventory of homes for sale in Tallahassee that are priced above $500K.
High End Homes For Sale In Tallahassee
High End Homes Idx
Relative Supply Of Homes
When we plot the supply above with the current rate of demand, we can get a picture of the relative supply of high end homes for sale in Tallahassee.
The real estate graph above shows why we are so concerned about the growing inventory of high end homes. The green bars show the number of homes sold in the past year and the red bars show the current number of homes for sale (both measured on the left vertical axis). The resulting months of supply is shown as a crimson line and measured on the right vertical axis.
The yellow line represents market equilibrium, the line where supply and demand are in balance and neither sellers nor buyers have an advantage in the market. Needless to say, it remains a buyer’s market.
Despite very healthy sales, we are seeing the months of supply of homes go through the roof when we get to home prices above $500,000. Right now, there is roughly 1 buyer for every 4 homes for sale above $500K.
Mortgage Interest Rates Sustain Market
Did you know that current mortgage interest rates are the best they’ve been since the 60+ year low was reached in 2012?
Right now, mortgage interest rates are less than a quarter percent above the ABSOLUTE LOWEST at which any living human has every borrowed.
House payments are likely as low as they can go, and it has created a fire in the market.
MORE people can afford high end homes than ever, and MORE people are buying and building high end homes. In fact, there is a high demand for “shiny and new” in the high end homes market, and that means that even though demand is near an all-time high, the supply of homes for sale above $500K is not declining like the rest of the market.
What do you think will happen as interest rates move higher and FEWER people will be able to afford high end homes? Do you think Tallahassee’s economy will spur a new batch of people who can afford million dollar homes?
Luxury Home Sellers Make Big Mistakes
I’ve spoken with two different homeowners this week who have homes worth well more than $500,000 and they were concerned about the current market. They thought the market right now was bad for them, but they were wrong in their understanding of WHY it was bad.
These homeowners wanted to know why there were not many buyers in the market. But if you look at the number of homes that have sold for more than $500K (in the graph above), you realize the market is really strong for high end homes.
Yes, it’s a tough market, but not because of a lack of demand. It’s a glut of supply that is the problem. Buyers want “new,” existing homeowners have “used.”
There is a lot of bad advice being doled out to these homeowners about what it takes to sell a high end home in this market.
NOT EVERYBODY SUCCEEDS
Did you know that more than 30% of home sellers fail with their first listing agent?
That's right, they end up waiting and hoping for a lone buyer to come in and offer anything for the home when they instead should be seeing multiple buyers competing for their home.
Sell your home fast and for top dollar, we'll show you how!
The fact is, you can sell a high end home at top dollar and it doesn’t have to take a long time. It’s merely a matter of identifying how many buyers exist in the market for the home, and then using digital marketing to hunt them down and present the home to them.
If you would like to see a demonstration of how this works for high end homeowners, simply drop me a note and we’ll schedule a time to demonstrate the best way to sell a high end home in today’s housing market.
