Property Values Decline As Demand Falls
We often provide opinions on property values in order to help home owners determine whether or not they are going to attempt to sell their home. Most homeowners are disappointed when they find out how far their property has fallen in value, but our clients have been happy to know the truth so that they were able to make an informed decision.
Having a true understanding of the current and near future housing trends is the key to being able to sell a home in a very difficult real estate market. Keeping an eye on what has happened recently is only part of the equation for determining property values, the real pricing strategy comes with an understanding of what is about to occur. While we do not have a crystal ball, we do have hundreds of real estate graphs that can point us out in the right direction.
In the graph above, we observe the one-year trend on four very important statistics for determining property values:
- Recent home sales - 7 homes are selling each day
- Recent home failures - 9.5 homes are failing to sell each day
- Pending home sales - 4 homes are getting contracts every day
- Daily new property listings - 14 homes are being listed "for sale" each day
When we take a "birds eye" view of this graph, we can see a general decline in all of the tracked categories. This is the slowing of the overall market, both in the supply side as well as the demand side. While none of these directly address the direction of property values, we are able to take this image and combine it with other tracked metrics to determine the direction of values in the Tallahassee real estate market.
Property values are dropping as demand falls. The pending home sales data shows a decline ever since the end of the Homebuyer Tax Credit in April, and the closed sales have fallen in conjunction with the declining contracts. We still believe the best prices for home sellers will come now, so we urge sellers to price attractively in order to exit the market under the best of bad circumstances.