MLS In Tallahassee Reports Ominous Signs
There has never been a tougher time to sell a home in Tallahassee, and there are ominous signs from the MLS in Tallahassee (the REALTOR® Mulitple Listing Service) that show things are getting worse. The four following real estate graphs paint an ominous picture for the coming months in the Tallahassee real estate market, and home sellers are warned. Sell your home now, sell it fast, and don't look back.
Note: This report of the MLS in Tallahassee shows current trends and is important information for home sellers. You can also follow this link to search all of the homes for sale in Tallahassee.
Pending Home Sales Ratio Flip Flops
When the real estate market in Tallahassee is stable, we see a relationship between closed home sales and new contracts (pending home sales) that does not waiver greatly. This relationship usually bounces around 70%, meaning the number of closed home sales usually hovers around 70% of the current pending contracts. But when the market fell to the floor beginning in 2007, this ratio changed greatly. And now it is happening again.
In the real estate graph above from the MLS in Tallahassee, we see that the ratio of closed sales to pending home sales (red line in graph) is on the rise again. This last happened at the end of the boom market in 2006, and it lead to a new market bottom in 2009. Currently, this ratio is near 100% and looks to be heading higher, indicating that the trend of closed home sales is heading for a further decline.
Relative Supply Of Homes Is Rising
Our normal review of the inventory situation shows that the relative supply of homes has exceed 18 months again and is rising. We measure the relative supply as the amount of homes for sale in the MLS in Tallahassee (months of supply of homes measured at the current rate of demand).
The market bottom that was established in August 2009 looks to be challenged before year's end, and all the signs point to this as a foregone conclusion. The market is clearly cooling, and home sellers can expect that competition for the very few buyers in the market is only going to get stronger.
Pending Home Sales Trends Negative
We looked at pending home sales for Tallahassee alone in yesterday's real estate market report, but today's graph shows the year over year pending home sales trends for the entire MLS in Tallahassee. It shows four straight months of year over year declines, as well as three consecutive months of seasonal declines, which is very abnormal for this time of year.
Normally, the summer months sees a great increase in the number of pending home sales, but the yellow area in the graph above shows that we are heading in an opposite direction of our normal home selling season.
Sales To Listing Ratio Picture
The final graph that we have to view is the home sales to listing ration. Normally, we like to see home sales run at about double the listing inventory (representing 6 months of supply). Most markets see traditional appreciation levels when this occurs. But we are not seeing this now.
In the real estate graph above, we can see examples of a great home sales to listing ratio (2003 to 2006) and then the opposite (2007 through present). The green line in the graph shows the one year home sales trend, and it is running at least 1,000 units per year to low. This decline in demand is the single greatest problem in the housing market, and without these buyers, home sellers are in for a tough ride.