May 2015 Housing Inventory Report
The supply and demand for housing in Tallahassee is following normal seasonal trends, meaning that the current supply of homes for sale is rising.
Fortunately for most home sellers, the current demand for homes is rising as well, so relatively speaking, buyers have fewer homes from which to choose.
This report is an overview of the current relationship between supply and demand for each price range and area in the Tallahassee real estate market.
Relative Supply Of Homes
The first graph is one that we publish each month in order to show the trend of the relative supply of homes (the months of supply of inventory, measured at the current rate of demand).
While there is a lot going on in this graph, it does create an excellent image of the changing supply and demand dynamic for homes in Tallahassee.
The green line measures the number of closed home sales each month (measured on the right vertical axis), while the red line measures the total number of homes listed for sale in the Tallahassee MLS (also measured on the right vertical axis). The resulting blue bars measure months of supply (relative supply, measured on the left vertical axis), while the blue line shows the one-year trend of this relative supply of homes.
The blue line shows us that the relative supply of homes for the past year has declined to roughly 7 months of supply. We consider the market in balance (market equilibrium) when the relative supply of homes reaches six months of supply, so the trend is definitely improving. Currently, we consider this to be a buyer's market when looking at the overall market for homes in Tallahassee, Florida.
Supply And Demand For Homes
Unless you are a builder, you are likely less concerned with overall conditions and more concerned for the supply and demand for homes similar to yours.
This next table summarizes the relative supply of homes for each price range and each quadrant in Tallahassee.
Anywhere we see the relative supply of homes drop below 6.0 months of supply, we deem it moving towards a seller's market. The opposite is true when we see relative supply move above 6.0 months of supply, which is considered a buyer's market. So how's the market for your home?
The following table gives the specific number of homes that are for sale and that have been sold for the past twelve months, allowing you to further understand the depth of competition in your specific market area.
If you would like a handy one-page portable version of the table above, simply click this link for a .pdf copy of the relative supply of homes report.
Housing Market Recovery
If you would like to see a "picture" of an improving housing market, simply look to the graph below. It shows the supply and demand for homes in Northeast Tallahassee.
The number of active listings are shown in red (measured on the left vertical axis), while the number of closed home sales is shown in green (also measured on the left vertical axis). The resulting relative supply of homes is shown in blue, and measured on the right vertical axis (months of supply). Anywhere we see the blue line within the gold field, we can say the market is in a healthy place. Below the yellow field means that there are more buyers than sellers, while above the yellow field means more sellers than buyers.
For Northeast Tallahassee, the supply and demand for homes below $300,000 is very good. When we look for homes price below $125,000, there are simply not enough to satisfy the current demand from homebuyers. But once we hit $300,000, there is still a glut of homes for sale.
We can say that for homes below $300,000, the real estate market has fully recovered and is strengthening. But take a look at the graph below, and you will get a glimpse of what a non-recovering housing market looks like.
Gross Oversupply Of Homes
The following graph was generated from the same type of information as in the graph above, but this one pulls listings and home sales from the Southwest quadrant of the Tallahassee real estate market. It presents a completely different picture than what we found above.
Only one price range currently qualifies as a balanced market, while all others are glutted with inventory and very few buyers.
It is important to understand that the West side of Tallahassee is still a long-way off from being recovered, and the Southwest quadrant specifically is grossly oversupplied.
It will take further price reductions to lure investors to sweep in and grab up this inventory, but don't expect this to happen all at once or anytime soon. The new student apartment developments are pulling a lot of prospective tenants away from these south and west side homes, so the primary cure for these homes is growth (more students, more jobs, more population growth).
Making Market Information Work For You
Just as we have segmented the Tallahassee real estate market by price range and area, we do the same thing for people considering selling a home or buying a home to ensure that our customers are armed with the best and latest information possible.
This overview report should give you solid insight as to what to expect when you enter the market, but we drill down much further when we know your specific situation and what you would like to accomplish. If you would like to know more about the supply and demand for your specific home (or desired home), simply drop me a note and we will be in touch right away.
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