Luxury Home Sales Defy Current Conditions
If you have any interest in the luxury home sales market, then you'll likely be surprised by how the most expensive homes in Tallahassee have been doing.
Take a look at all the homes for sale priced above $700K, and then follow with the report that shows this segment is actually soaring in 2020!
Homes For Sale In Tallahassee Priced Over $700K
Luxury Home Sales During COVID-19
When I was assembling today's luxury homes sales report, I was shocked to discover that the market is up! That's right, the number of luxury homes sold in 2020 is actually 19% than during the same periods in 2019 and 2018.
The graph above shows the total number of luxury homes sold (by price range) for the past three years. Sales in 2020 are shown in blue, 2019 sales are shown in red, while gray is the color used for 2018 luxury home sales.
If you subscribe to our weekly special real estate report, then you already saw the report that showed a different version of the graph above with cumulative sales figures. Both images are enlightening.
Thus far, the high-end of the housing market appears immune to the impact of the pandemic, and I share what I believe to be the cause below.
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Supply And Demand For Homes In Tallahassee
When we look at the supply and demand figures for Tallahassee, we can observe that luxury homes exist in different market conditions than do the rest of the market. The majority of the market is in a strong seller's market, while homes at the higher end remain in a buyer's market due to the glut of supply.
We have been reporting for more than a year that the supply of homes was too low and that prices were rising faster than normal (for most homes priced within the bottom 95th percentile.
The table above reports the non-seasonal months of supply of homes for sale, and a number of 6.0 is traditionally considered a balanced market (green shaded area above) where neither sellers nor buyers have a stronger position. When the numbers go lower, we enter a sellers' market (red area). The opposite is true for higher numbers as we find a buyers' market (orange area).
Additionally, we have reported that the decline in home sales since the start of the pandemic was due to sellers (not buyers) leaving the market and that buyers within this majority are competing for the few homes that hit the market each day.
Luxury home buyers have the luxury (pardon the pun) to go house shopping as the inventory level is high, but buyers at lower prices do not get to shop. They sit and await the next listing to hit the market and then decide if they like it enough to get in a bidding war for the right to buy the home.
If you have been thinking about moving but COVID-19 has got you concerned for your safety, just give us a call and we'll share what we've done to help other sellers safely sell their home during the pandemic. If you do decide now, it will put you in a low-competition market which results in stronger demand for your home. Additionally, if there is a future rush to market from sellers who waited, you won't get caught up in a situation where there is too much inventory.
Answers To Frequently Asked Questions
Recent Housing Market Reports
Your Local Expert In Tallahassee
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