November 2020 Inventory Report - Musical Chairs Edition

The November 2020 Inventory Report is ready to go, and the theme for November is “musical chairs.”

As you know, “Musical Chairs” is a party game in which players compete for a decreasing number of chairs, the losers in successive rounds being those unable to find a chair to sit on when the accompanying music is abruptly stopped.

So how does this relate to the housing market? Just check out today's report! 

First, here's a peek at the newest listings to enter the market, sorted by the date they hit the market, newest first. Of course, you can re-sort them if you like.

New Listings In Tallahassee

Musical Chairs Time For Home Sellers

Normally, November comes and the market is heading towards a holiday stop. In fact, in normal years, November is about the slowest month for new listings entering the market.

But this is 2020. This is not normal. The market is hotter today than it was in April or May. 

Let’s take an in-depth look at the supply side of the housing market and examine exactly what's happening with the inventory of homes for sale.

I’ll give you a  hint before we move on ... sellers are coming back! 

Year Over Year Reveals Growth In New Listings

The number of new listings entering the market is growing over the past four months.

The graph above shows a comparison of how each month fared (percentage-wise) compared to the same month in the prior year for fresh new listings entering the MLS.

I use the term “fresh” to describe homes listed for sale that were not previously listed. These are homes that are truly new to the market, not merely old inventory that was canceled and relisted by the agent or a new agent.

The year started off well with new sellers entering the market, but then COVID kicked in and caused inventory to move much lower.

The past four months have recorded fifty-seven more fresh listings than in the same four months of last year. July and September showed good gains, while August and October had nearly identical numbers as 2019. It appears as if we’re finally seeing pent-up supply starting to release.

Now that people who want to move are noticing friends and families safely selling their homes, I'm hopeful we'll see more existing homeowners enter the market. They should want to sell so they can buy their next home and take advantage of the lowest mortgage interest rates ever recorded.

If you have been waiting to sell your home, now is the time. Buyers are standing by and you’ll get top dollar.

As a reminder, we initiated safety measures that allow us to massively market a home while reducing risks to home sellers. Today's technology allows us to do quite a bit without having to visit a property in person.

The following graphs show that we're still needing more sellers to keep up with enhanced buyer demand.

Fresh Inventory Report

The following graph shows the number of fresh new (existing home) listings is down 9% in 2020 when compared to the same period last year.

Remember, this is a market that started the year with too few homes, so a reduction in what is being listed is only going to push prices higher and create pent-up demand for homes.

While this might seem like "good news" for sellers as their homes are worth more, you also have to remember that most sellers are going to be buying another home in the same market (with the same soaring prices).

The fact that fresh listings are down 9% can be softened by the fact that this year is not the lowest one shown in the graph. There have been more fresh existing home sellers in 2020 than there were in 2016 and 2017.

Of course, the existing home sales market does not stand alone. We also need to examine what the builders have been doing.

Surge In New Construction

Similar to the previous graph that showed fresh listings for the existing homes market, the following graph shows freshly listed new construction homes.

Homebuilders must have heard our message, they are building more homes. Unfortunately, they are are not covering the cap between supply and demand.

Back in the 1990s, builders were bringing more than 1,000 new homes per year to the market. Right now, with a large shortage of homes, they should be building about 1,500 per year and monitoring the supply and demand numbers to ensure that they're not building too many at any given price point.

When we combine new homes with used homes, we get the following graph that shows the total number of fresh new listings that have entered the market through October.

Fresh New Listings In Tallahassee

This graph reveals that builder homes have helped close the gap so that 2020 is no longer the worst year on record for new inventory. Remember, today's sky-high demand has created optimal market conditions for sellers.

Despite this influx of new homes, the relative supply of homes for sale has hit a new low. So what does that mean?

It means that the supply, relative to the current hot rate of demand, is lower than ever. Even with more new homes and more existing homes, the growth of the buyer pool has reduced the months of supply of homes for sale.

Recently, I stated that for every buyer that closed on a home in October, there was more than one buyer that missed out on the chance to buy a home. The closings would have been more than double the rate closed had there been more available listings.

The fact is, this is the hottest seller's market ever, so if you've been thinking about moving, it's time to act.

Musical Chairs In The Housing Market

I believe there are still some homeowners who have been "sitting on the fence," unsure about selling their homes during the pandemic. This was a very large group of people back in April, but it is much smaller today.

Anybody left remaining can still enjoy the strongest seller's market ever recorded in Tallahassee, but understand that you are in a game of musical chairs. Interest rates are low, the longer you wait, the higher the price you'll get for your home. Until the music stops.

The music is mortgage interest rates rising. Rising rates will not reduce the value of your home, but it will increase your monthly payment on the home you buy next.

Take advantage of low mortgage interest rates (if you are buying after you sell), or just take advantage of the strong demand that low rates have created. Enjoy the strongest seller's market ever recorded in Tallahassee by selling your home for every dollar it is worth (and fast!).

When moving to, in, or from Tallahassee, you will fare better if you work with a local expert. We are here to help. If you have further questions on the Tallahassee real estate market, you can leave a comment below, give us a call at (850) 366-8917, or drop us a note and we'll give you the local information needed to ensure a successful, smooth transaction.

As a local born and raised in Tallahassee with a focus on customer service, I promise you'll find great success when working with Joe Manausa Real Estate, just as have our past customers. You can read thousands of their reviews reported on Google, Facebook and Zillow right here: Real Estate Agent Reviews Tallahassee.

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