October Confirms Strong Year For Tallahassee Home Sales
The final numbers have been published for Tallahassee home sales in October 2015, and they confirm what are preliminary figures were reporting ... October was another good month for the real estate recovery.
If you happened to see our Weekly Special Real Estate Report this morning, then you know (through October) we were a mere 10 home sales short of hitting the number posted through 12 full months in 2014. That means through the writing of this report, Tallahassee home sales are the best they have been in more than 9 years!
Rather than simply report the good news as a number, this post will drill down a bit to find out what is really going on and how it might impact the Tallahassee real estate market in 2016 and beyond.
Positive Tallahassee Home Sales Report
After many years of producing dark reports about the collapse of the housing market, it is a thrill to continue to bring reports of improvement. In the real estate graph below, we see home sales in Leon County, Florida reported through October of each year, from 1991 through 2015.
Single family detached home sales are shown in dark red, while condominium and townhouse sales are shown in pink.
The total number of home sales have surpassed 4,000 through October, a number that would have been "above average" in the 1990s. This is a major step in the restoration of our market, and much closer to the number of sales you would expect with the population that we have here in Leon County.
Fewer Distressed Home Sales
Another reason to be excited about this month's housing report is that the ratio of distressed property originations and sales continue to decline.
The graph above compares new lis pendens (the beginning of new foreclosures) and foreclosure sales to the total number of sales in our area. Currently, Leon County is reporting a ratio of 1 in 5 for both lis pendens and for foreclosure sales. This means that for every 5 sales that occur in the Tallahassee real estate market, one new distressed property is created.
Again, this declining trend is good news, but the ratio is still far too high to consider Tallahassee fully recovered from the housing market collapse. Look to see this trend continue to decline until it levels out far below 15%.
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Home Prices In Tallahassee
Home prices are high in Tallahassee, much like they are everywhere else in the US. But if you read our recent report showing why home prices will go even higher, than you might be interested in seeing how they are now versus where they have been over the past 25 years.
In the graph above, we track the one-year trend of average home prices. Single family home prices are shown in red, while condominium/townhome prices are shown in green. The dashed line merely extends the 1990s appreciation rate through today.
When we look at current home prices compared to what we would have forecasted back in the 1990s, we can see that single family homes are slightly higher, but condos and townhomes are still priced well below expectation.
The excessive construction of condominium units and townhouses has created a glut in the market, and this glut has kept prices lower than the market would have allowed had we not built so many. This likely means that some of the better deals in the market are attached homes, and investors will see their best long-term ROIs in condos and townhouses.
It continues to be costlier to build new homes, so only an imbalance in the market will hold prices down. If you pay close attention to the supply and demand for homes in all areas, you will be able to hold an advantage to those that are less-informed when it comes time to negotiate.
And if you want to negotiate a real estate transaction in Tallahassee, we'd love to help you. We have the most up-to-date information on the Tallahassee real estate market and are glad to show you how we can help.
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